Daily Development for Thursday, January 4, 2001

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

ZONING AND LAND USE; VARIANCES: If a successor use is sufficiently similar to the variant use for which a variance was granted, such as if it is in the same use category in the zoning ordinance, the successor may enjoy the benefit of that variance.

The Stop & Shop Supermarket Co. v. The Board of Adjustment of the Township of Springfield, 162 N.J. 418, 744 A.2d 1169 (N.J. 2000)

A supermarket sought to open and operate on property previously owned by a department store. It filed suit to challenge the determination of the municipality's Board of Adjustment that it could not rely on the use variances permitting parking and later, construction of an addition on the residentially zoned portion of the lot granted to the department store many years earlier.

The property was split zoned into two portions: residential and commercial. Originally, the department store was located entirely within the commercial zone. Accessory parking for the department store was located partly in the commercial zone and, pursuant to a use variance, partly in the residential zone. Later, pursuant to a second use variance, the department store was permitted to construct an addition to its building in the residential zoned area.

In granting the original use variance to the department store, the municipality's zoning board concluded that the residential zoned portion of the property was unsuitable for residential development; that the property's "highest and best use" would be achieved by the grant of the use variance to integrate development of the entire property; and that the proposed use would promote the general welfare and preserve and enhance property values by removing the danger of haphazard and inconsistent residential development.

The second use variance noted that the area in question was no longer suited to residential use and that the department store provided shopping "of a quality not otherwise available in the community." After the department store closed, the supermarket operator, intending to use the site for its business, was informed by the zoning officer that it could not rely on the previously granted use variances to operate its retail supermarket on the department store's property. It was told that it could seek a new variance, rezoning of the property, or zoning board review of the determination.

The supermarket operator appealed to the board, contending it was entitled to rely on the use variances previously granted to the department store. The board voted to sustain the zoning officer's conclusion that the supermarket applicant required a new use variance to operate its supermarket on the property. The board's resolution noted that the supermarket declined to offer proofs concerning a qualitative comparison between the previously approved use of the residentially zoned property and the newly proposed use of that property. The board concluded that the applicant failed to demonstrate that the business it intended to operate on the property was of a nature, kind, or use intensity similar to that of the department store operation and thus it did not permit the supermarket to rely on the previously granted use variances.

The supermarket filed a complaint before the Law Division and that court reversed the determination as an abuse of discretion, ruling that the applicant did not need a new use variance to operate a supermarket on the property. In reaching that conclusion, the Law Division reasoned that the question whether the supermarket's use of property was qualitatively similar to the department store's use was irrelevant; that the category under which both types of retail services fell were not distinguished in the zoning ordinance; and that use variances are not personal to the owner, but run with the land.

On appeal, the Appellate Division reversed the decision of the Law Division, finding the differences between the two enterprises precluded reliance on the previously granted use variances.

On further appeal, leading to the instant case, the New Jersey Supreme Court disagreed with the Appellate Division and upheld the Law Division's determination that no use variance was required. In doing do, it held that variances run with the property, and are not personal to the applicant; thus, successors in title may avail themselves of the previously granted use variance. "Notwithstanding the prospect of a more intense use of the property and the obvious distinction between the enterprises carried on by a supermarket and by a retail department store, the decisive factor is the municipal ordinance in effect when [the supermarket] submitted its application. That ordinance treated the two uses identically retail department stores and retail food stores fall under the same use category in the ordinance." In addition, the objectors' reliance before the zoning board on the "very upscale" and "very expensive" quality of the department store's merchandise and its "dignified" atmosphere failed to take into account the possibility that the department store could have sold its property to a less "dignified" department store whose hours, volume and traffic patterns could have been far more intrusive on the neighborhood than the original department store.

Consequently, the question was not whether the successor use was "essentially duplicative" of the use for which the variance was granted, but rather, whether, considering all relevant factors, the successor use was sufficiently similar to the variant use to afford it the benefit of the variance. Here, the parking lot use for which the variance was granted remained unchanged, except that it was to be a use accessory to a supermarket rather than to a department store. By classifying those two uses identically in its zoning order, the municipality demonstrated that the distinction did not constitute a valid basis for denying the supermarket the benefit of the prior variances.

Comment 1: In his youth as a "young Turk" neighborhood organizer, the editor often was faced with appeals by commercial interests for zoning benefits based upon the specially attractive nature of the party operating the business. Perhaps that party had been a long time local business that had established a great deal of good will. Perhaps it operated a business that was of particular interest to the local community. Consequently, based upon these very individualized concerns, the zoning authorities were pressed to "do what was right" and grant a benefit to these businesses. The editor, in his Turkdom, often attempted to point out that the zoning benefit being conferred went far beyond that necessary to provide community service, and that the party receiving the zoning benefit could in the future easily terminate the desired service and keep the zoning benefit. The answer, all to often, was that there were no sufficiently narrow zoning devices to insure that the desired service, and only the desired service, would result from the conferring of the zoning benefit.

As this opinion demonstrates, the editor's concerns were well founded.

Modern, more flexible zoning techniques sometimes allow more tailored zoning benefits, but they do so at the risk of permitting sweetheart deals and other challenges to good process. Further, those techniques work better in the larger development projects where there is room for give and take from both sides, and not the little neighborhood compromises when the family owned five and dime threatens closure if it can't have a little extra parking. No one wants to lose the five and dime, but no one wants a minimarket at that location either.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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