"Using Use Variances To The Maximum with Stop & Shop v. Board of Adjustment, Municipalities Struggle to Accommodate Use Variances Grows More Difficult" Published March 18, 2002
Stephen Hankin's article published in The New Jersey Law Journal: "Using Use Variances To The Maximum with Stop & Shop v. Board of Adjustment, Municipalities Struggle to Accommodate Use Variances Grows More Difficult" Published March 18, 2002
THE AFTERMATH OF STOP & SHOP vs BD. OF ADJUSTMENT:
THE MUNICIPAL STRUGGLE TO ACCOMMODATE USE VARIANCES
By: Stephen Hankin
It is difficult to imagine the right of a Dunkin Donuts or Kinkos - heavily intense, 24-hour operations - to rely upon a prior owner's use variance for a mom and pop grocery store in a residential zone, without the need for a further use variance, simply because they happen to be similarly categorized uses under the local zoning ordinance. Attorneys, land use boards and municipal planners alike have generally been of the view that once a use variance has been granted there can be nothing other than an insubstantial change in use without the need to secure another use variance. After all, this has long been the established precedent in the instance of the enactment of a zoning ordinance which renders a use nonconforming. Both logic and commonsense dictate there should be no different rule in the instance of a nonconforming use created by variance rather than by ordinance.
Nonetheless, in Stop & Shop vs Bd. of Adjustment, 162 N.J. 418 (2000), the New Jersey Supreme Court, in reversing the Appellate Division, with Justices Coleman and Garibaldi in dissent, held that use variances granted to Saks Fifth Avenue in 1956 and 1968, permitting it to create accessory parking for, and to expand its department store within, the residentially-zoned portion of its property, could be relied upon by its successor in interest, without a further use variance, in using the property as a retail supermarket. Surprisingly, this decision has been the subject of little published comment.
Professor Cox has remarked this opinion logically [is] applicable only to split-zone cases, and that [i]t is almost impossible to imagine otherwise. He has further postured:
Clearly, the Court could not have intended that a board of adjustment considering an application for a sit down restaurant that might be appropriate in a residential zone should rule against the proposed use because it could be changed some day to a fast food restaurant inappropriate for the zone.
However, there is not the most remote suggestion in either Justice Stein's majority opinion or in Justice Coleman's dissent that Stop & Shop's holding only applies to split-zone lots. Moreover, one unpublished Law Division opinion by an Assignment Judge, since elevated to the Appellate Division, construes Stop & Shop within the context of a single zone parcel.
A closer analysis of Stop & Shop is important because of its likely ramifications and the concomitant need for municipalities to promptly prepare themselves for what is very likely to face them with otherwise insufficient opportunity.
The Scope of the Opinion
The portion of Saks' split-zone property which was contained in a General Commercial (GC) District permitted places of worship, professional offices, indoor movie theaters, retail sales and service stores and shopping centers containing these uses. The municipal zoning ordinance in effect when Stop & Shop (S & S) unsuccessfully sought board review of the zoning officer's refusal to issue a Certificate of Occupancy classified both retail department stores and retail food stores under the same permitted use category of Retail Sales and Services, that is, within the same use group.
The scope of Stop & Shop is best analyzed within the context of the issue the Court itself framed as being:
...not whether the successor use is ëessentially duplicative' of the use for which the variance was granted...but rather whether, considering all relevant factors, the successor use is sufficiently similar to the variant use to afford it the benefit of the variance. [emphasis added]
The Court then went on to say:
The Township of Springfield, by classifying those two uses identically within its zoning ordinance, has demonstrated that the distinction does not constitute a valid basis for denying S & S the benefit of the prior variances.
This makes it clear when both the variant and proposed uses are contained in the identical use group, the sufficiently similar test is satisfied as a matter of law. Indeed, throughout his opinion, Justice Stein repeatedly refers to the fact of the same use category and identical municipal treatment of the uses as being the decisive factor.
Admittedly, the Court remarked that a successor user to an indoor tennis court could claim the right to operate a racquetball, squash and indoor pool facility but described as more tenuous the substitution of a bowling alley serving food and drink. However, if the bowling alley and tennis court are both included within an ordinance's definition of recreational centers, the per se rule announced by the Court would still apply. The dissent aptly noted that beyond those circumstances where the proposed use falls within the same use category as the variant use, the majority neither articulate[d] a standard for determining which successor does not benefit from the variance nor indicate[d] who makes the determination. Indeed, the majority itself conceded that [A]t its outer limits resolution of the issue may be elusive, suggesting as a solution that:
...local zoning boards and officials...consider...the functional similarities and differences between the uses at issue, whether in accordance with sound planning principles the proposed use generally would be includable in the same use classification as the use for which the variance was granted, as well as whether the board that granted the initial variance reasonably could have anticipated that its scope could encompass the use subsequently proposed.
While this does provide a zoning board with the discretion to examine its prior intent in granting a use variance, it does so only where the variant and the newly proposed uses do not have the same use classification. In addition, where, for example, a successor seeks to operate a bowling alley with food and drink in reliance upon a use variance granted to a dissimilarly categorized indoor tennis court, the outcome is still far from certain. The zoning board's prior findings may not have been sufficiently thorough or specific to determine its intent and thereby limit the use variance to the variant use only. The municipality, while not including both a tennis court and a bowling alley in the identical use category, may have included both as uses permitted by right in the same zoning district. Since both a tennis court and bowling alley are recreational uses, functionally both are identical in nature even though not contained in the same use category. It may be demonstrated that an inherent part of the modern day indoor tennis court also involves the service of food and drink. Accordingly, even in circumstances where the variant and proposed uses are not identically categorized, a use variance applicant may be able to rely upon the prior use variance because of the absence of an expressed, contrary intent. Indeed, zoning boards continue to be constantly reminded of the critical importance of including specific factual findings in their resolutions.
Logic In The Dissent
The majority failed to find guidance in several critical principles embraced by the dissent.
First, the Court rejected the essentially duplicative test in favor of the sufficiently similar test. Instead of examining the reasons for granting the variance, such as evaluating the impact of the proposed use on the negative criteria which the dissent felt was instructive, the majority adopted a per se test where the variant and the sought-after uses are identically categorized. Where the variant and proposed uses are similarly categorized, the prior intent of the board is no longer material: permissibility of use is now measured by the four corners of the zoning ordinance. For example, the Court ignored significance in the fact, as noted by the dissent, that the earlier use variances were specifically granted for a suburban department store with off street parking. The Court's reasoning regarding this fundamental issue is particularly difficult to accept. A use variance requires consideration of both special reasons and the negative criteria as well. Where the special reason has consisted of an inherently beneficial use but one which is in the same use category as a newly sought-after, non-inherently beneficial use, clearly a further use variance should be required. Allowing a non-inherently beneficial use without a further use variance in this circumstance strikes at the very special reason underlying the original use variance. Thus, if a seeing-eye dog kennel has been the subject of a prior use variance because of the inherently beneficial use attached to it, a veterinarian should not be permitted to rely upon that approval without seeking a further use variance simply because both uses happen to be similarly classified as Animal Care Facilities. In addition, threshold consideration of the negative criteria focuses upon whether there will be substantial detriment to the public good, that is, an evaluation of the impact of a particular use upon the neighborhood. A different, newly sought-after use, even though it may be definitionally part of the same use group as the variance use, may therefore have a different impact because it too is not permitted by right in the subject zone. In other words, the proposed use may very well have an impact upon a zoning board's prior negative criteria determination supportive of the variant use. As Professor Cox has put it:
But while such a category of uses, when all permitted in a particular zone in conjunction with other similar uses, may be acceptable to the governing body as being in keeping with sound zoning and planning, some uses in such categories may be wholly inappropriate in isolation in a different zone while others might support a variance application.
Secondly, the majority failed to even make reference to its earlier decision in Town of Belleville vs Parrillo's, Inc., supra.
In Belleville, a restaurant was changed to a discotheque without municipal approval resulting in an ordinance conviction for extending a nonconforming use. The issue was framed as whether a change from a business primarily conducted as a restaurant with incidental dancing and serving of liquor (can) survive the proscription of the prohibiting ordinance when the character of the operation shifts to a form primarily conducted as a dance hall with the serving of liquor and incidental seating. The Supreme Court affirmed the conviction, finding that it was inappropriate to analyze the case within the context of the fact that each aspect of the discotheque had previously been conducted. Under Stop & Shop's reasoning, if the discotheque had been defined in the same use group as a restaurant, there would have been be no change in use as a matter of law.
The restaurant in Belleville was nonconforming as a result of a subsequently enacted ordinance rather than by means of a use variance. Because determinations involving subsection (d) criteria, and most especially the impact of negative criteria, are not in issue in the instance of a non-conforming use created by ordinance, it is only logical to assume the same use group test more forcibly applies to nonconforming uses created by subsequently enacted ordinance than to those created by variance. However, as the Belleville Court put it:
[T]he focus in cases such as this [where nonconforming uses are created because of a subsequently enacted ordinance] must be on the quality, character and intensity of the use, viewed in their totality and with regard to their overall effect on the neighborhood and the zoning plan.
Justice Clifford in Belleville expressed the Court's philosophy that only where the continuance of such a nonconforming use is substantially the same as the use conducted at the time of ordinance passage will the use be tolerated, that any change which is more than negligible or insubstantial requires judicial or administrative interference and that:
Where there is doubt as to whether an enlargement or change is substantial rather than unsubstantial, our courts have consistently declared that it is to be resolved against the enlargement or change.
Stop & Shop is thus squarely at odds with the Court's earlier expression in Belleville.
In Ivory Beach Condominium Association vs City of Margate, supra., in the mid 1980's, the Margate City zoning board of adjustment granted a use variance to permit a refreshment pavilion on the beach in a residential zone. In the late 1990's, a successor user converted the refreshment stand into a full-service restaurant, with complete gourmet dinners and late evening dining. The restaurant became so successful that reservations became necessary. An adjacent residential condominium association filed a prerogative writs suit, asserting, among other contentions, that this change of use required a new use variance or at the very least the filing of a use variance application. Noting that Margate's zoning ordinance definition of restaurant did not differentiate between refreshment pavilions and full-service restaurants, Judge Michael Winkelstein, in reliance upon Stop & Shop, dismissed the complaint.
Because zoning boards are now usurped of any discretion to require a new use variance where the use sought is contained within the same use category as the variant use, it is important to explore other available municipal remedies.
The most important prophylactic step is for municipalities to promptly examine their use classifications to ensure no uses are included which potentially could cause serious impact if substituted for similarly categorized prior or future variant uses.
Municipalities should also examine their bulk ordinances in an effort to distinguish what differences should be required with respect to those uses which remain identically classified.
The Court in Stop & Shop, in recognition of the fact that the supermarket would likely involve longer hours, more traffic and a greater volume of business than did the Saks use, suggested municipal resort to the site plan provisions of the Municipal Land Use Act [MLUL]. However, for a number of reasons the potential harm to neighboring properties cannot usually effectively be remediated by site plan mechanism.
Of course, municipalities in the first instance must be sure they have in place ordinances requiring site plan approval for all changes of use even if to an identically classified use.
However, there are statutory restrictions upon the exercise of site plan jurisdiction. Site plan power does not provide land use boards with the means of denying uses at particular locations. Instead, it is designed merely to assure sound on-site design. It is well established that the MLUL contains no provision...that would vest in the planning boards the power to deny a site plan because of the intensity of vehicular traffic on adjoining roadways or in other parts of the municipality. Even though typically [site plan] review encompasses such issues as location of structures, vehicular and pedestrian circulation, parking, loading and unloading, lighting, screening and landscaping, such controls may well be insufficient to negate the impact of the new use.
Hours of operation ordinances would seemingly be more beneficial but there is nothing in the MLUL which permits, by means of site plan power, the imposition of operational time limitations. Hours of operation restrictions can be imposed under the general municipal police power but only where the specific businesses being regulated present a clear danger to the public health or safety.
Whatever site plan criteria can be effectively imposed will not normally be effective to defeat an identically classified use because matters such as on-site circulation, lighting, drainage, sewerage, soil erosion and the like, for the most part, can be satisfied while the negative impact of the new use still remains. These controls can effectively cure on-site conditions but normally cannot lessen the off-site impact flowing from the intensity of on-site use. This is precisely why the dissent in Stop & Shop said:
Increase in traffic is a legitimate concern of the Board both when considering whether to approve use variances in the first instance...and when considering whether a new proposed use is substantially different from the variant use. S & S's need for seven loading docks for its large truckloads of merchandise in contrast to Saks' need for only one dock graphically depicts the anticipated substantial increase in traffic and hours of operation.
In those circumstances where appropriate use group segregation has not occurred, a zoning board entertaining a new use variance application, that is, one which does not rely upon a prior variant use, must naturally carefully consider all of the other uses which are contained within the identical use classification. As the Stop & Shop Court said:
The lesson is that in granting use variances boards of adjustment must anticipate that uses in the same use category as the applicant, but with different merchandising characteristics, may someday occupy the property and claim the benefit of the prior variance.
This raises the somewhat thorny issue of whether a zoning board, in granting a use variance, can, by express condition, preclude a different use by a successor where, as in Stop & Shop, both uses are contained within the same use category. In Stop & Shop, while the 1956 variance was granted for a suburban department store with off-street parking, no express restriction was imposed. Moreover, without any suggestion that such a condition could have been imposed, Justice Stein said:
The Township of Springfield, by classifying those two uses identically within its zoning ordinance, has demonstrated that the distinction [between department stores and supermarkets] does not constitute a valid basis for denying S & S the benefit of the prior variances.
It is thus questionable whether a Court would permit a zoning board to impose a condition which is contrary to the use classifications of the governing body's zoning ordinance. The conspicuous absence of any suggestion that a future use prohibition could be imposed in identical use classification cases is particularly troubling because our Supreme Court has never hesitated to inform us of those measures which can be adopted, where possible, to avoid the seemingly harsh implications of its decisions.
Hopefully, in short order, we will receive some definitive judicial guidance before deserving use variance applicants receive the backlash of Stop & Shop's unclear principles. It is anticipated that this instruction will come as a result of claims by original use variance recipients desiring themselves to operate different uses as much as it will from claims by successors-in-interest.