USA – NEW JERSEY Law and Practice Contributed by: David Freylikhman, Cory Mitchell Gray, David Jensen and Jody Saltzman, Greenberg Traurig LLP
(addressing municipal approvals only), a municipal - ity will require submission of a site plan application to approve a development that is permitted in the applicable zone. Demolition and construction appli - cations will typically be required where an existing structure is not being retained. If the use is not one that is approved in the zone, or if the structures are non-compliant with the zoning requirements, a prop - erty owner would submit a variance application (or a site plan and variance application) to the applicable municipal zoning agency. Notice of the application must be provided to real property owners within 200 feet of the proposed development, and all members of the public, as well as anyone purporting to be affected by the proposed development, may appear and object at the hearing. Objectors also have the right to present evidence and expert testimony. The variance process may take as little as three to six months for a simple application or as long as 12 to 24 months for major variance appli - cations. Applications involving multiple agencies – particularly those located in sensitive ecological areas – may take up to several years. Agreements between developers and municipalities are properly available only in limited circumstances. In the ordinary course, a developer would have to pro - ceed through a request for rezoning or an application for site plan approval (with or without variances) to obtain municipal approvals. However, it is not uncom - mon for such approvals to be “conditioned”, with the developer’s agreement, upon the developer address - ing appropriate land use issues caused or exacerbat - ed by the proposed development (for example, traffic flow, public safety). Further, in the case of applications not requiring a use variance, it is typical for the municipality’s pro - fessionals to meet with the developer’s professionals to attempt to reach agreement as to any of the issues presented on the application. In certain other con - texts, primarily with respect to blighted or distressed areas, Redevelopment Agreements and PILOT (Pay - ments In Lieu of Taxes) Agreements are commonly used in New Jersey, but their use is not applicable to
all properties. For a Redevelopment Agreement, the municipality must first designate the property at issue as an area in need of redevelopment (pursuant to state statutory criteria). A Redevelopment Agreement can be negotiated, executed and approved by the municipality’s govern - ing body (though it is common for such details to be agreed upon prior to the designation of a site for rede - velopment). PILOT programmes similarly incentivise developers to restore distressed or blighted areas, and PILOT agreements are often executed in conjunc - tion with a Redevelopment Agreement. An applicant or other person aggrieved by a municipal zoning decision has the right to file an appeal within 45 days of publication of the decision of the municipality in a newspaper of record (whether physical or digi - tal). The Superior Court will then schedule a trial, and a single judge will determine whether, on the record created before the municipal agency, the zoning deci - sion should be affirmed or reversed. Municipal zon - ing decisions are given great weight and are upheld unless they are determined to be “arbitrary, capricious or unreasonable”. The trial court’s decision is subject to appeal to the Appellate Division, which typically consists of a three-judge panel. In the case of denial of a variance or application for development, the municipality would obviously not issue any permits pending the appeal; in the case of the grant of an application for a variance or develop - ment, a municipality may issue such permits pending appeal, typically upon the posting of a bond by the applicant to ensure that, in the event that the appeal results in a reversal of the grant of the variance or zoning application, the site can be restored. Many municipalities will not issue such permits during an appeal by objectors. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets New Jersey recognises various business entities that are available to owners of real estate, including lim - ited liability companies, corporations and partner -
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