In a recent decision, the New Jersey Appellate Division confirmed that if a developer or business owner follows the Municipal Land Use Law (“MLUL”), the Time of Application (“TOA”) Rule will allow for an application to proceed to applicable board review as submitted. This means that applicants will not be forced to change their submitted applications if regulations at the state or local level are changed in the middle of the application process. This is a critical court decision detailing the scope of the MLUL and the TOA Rule, particularly for those investing in New Jersey’s flourishing cannabis market, which routinely leaves license holders and property owners subject to ever-changing local and state regulations.
In this matter, the Appellate Division reversed a trial court order that vacated a resolution of approval for Blue Violets LLC’s (“Blue Violets”) retail cannabis business to operate within 600 feet of a primary or secondary school within the City of Hoboken (the “City”). The Appellate Division found that Blue Violets’s submission to the Cannabis Regulatory Board (“CRB”) was an application for development to a municipal agency under the MLUL and was therefore subject to the TOA Rule[1].
The City established the CRB to serve as its advisory committee for all cannabis-related applications. Critically, each cannabis application required an endorsement by the CRB as a prerequisite before review by the City of Hoboken Planning Board (“Planning Board”)[2]. In February 2022, Blue Violets submitted its cannabis application to the CRB. In April of that year (while the application was still pending before the CRB), Ordinance B-446 (the “Ordinance”) was adopted. The Ordinance prohibited any cannabis retail business from operating within 600 feet of a primary or secondary school[3]. Blue Violets’s application was officially approved by the CRB after the City adopted the Ordinance but before the Ordinance went into effect.
After a public hearing in September 2022, the Planning Board unanimously approved Blue Violets’s conditional use application for its cannabis business. The Planning Board applied the TOA Rule to determine which ordinance governed the application. Pursuant to the TOA Rule, regulations in effect “on the date of submission of an application for development” will subsequently apply. See N.J.S.A. 40:55D-10.5. Along this vein, “any provisions of an ordinance . . . that are adopted subsequent to the date of submission of an application for development, shall not be applicable to that application . . . .” Id. By applying the TOA Rule, the Planning Board found that Blue Violets’s application was an application for development which began to run when the application was submitted to the CRB. Thus, Blue Violets was entitled “to [the] application of the [O]rdinance as it existed” and the time of its submission.
In October 2022, Hoboken for Responsible Cannabis, Inc. (“HRC”)[4] filed a complaint in lieu of prerogative writs challenging the decision. HRC argued that Blue Violets’s submission to the CRB was not an application for development as defined by the MLUL and that the TOA Rule should not have been applied. Along this vein, HRC asserted that even though CRB approval is a prerequisite before review by the Planning Board, it was only a “submission” requirement.
In September 2023, the trial court ruled in favor of HRC and vacated the resolution. The trial court held that Blue Violets’s submission to the CRB “[was] not an application for development under the MLUL . . . because the [CRB] does not give approval for conditional use variances in subdivision plot[s], site plan . . . [or] zoning variance for direction of the issuance of a permit.” In addressing the TOA Rule, the trial court relied on the fact that the Planning Board did not formally accept Blue Violets’s application until after the Ordinance went into effect.[5]
The appeal followed. In rendering its decision, the three-judge panel relied on the statutory language of the MLUL, TOA Rule, and the legislative intent behind it. The court found that Blue Violets’s submission to the CRB was indeed an application for development because Blue Violets’s submission was certified by “a municipal agency or its authorized committee or designee.”[6] In effect, the court determined that the CRB served as an “arm” to the Planning Board since it reviewed all cannabis-related applications within the City. As such, the court concluded that the CRB fell within the definition of “municipal agency” under the MLUL[7]. Accordingly, since the terms in the TOA Rule were construed in accordance with the definitions set forth in the MLUL, the panel found that Blue Violets’s submission to the CRB was indeed an application for development.
The court then turned to the purpose of the TOA Rule, which was enacted “to assist developers and property owners”[8] to “avoid an absurd result.”[9] When enacted, “[t]he Legislature was concerned about situations in which an [applicant] would spend time and money pursing an application, only to have a municipality change the zoning to the [applicant’s] detriment while the application was pending.”[10] The court determined that Blue Violets’s application fell strictly within the situation contemplated by the Legislature. In applying these principles, the Appellate Division concluded that the trial court erred in holding that the TOA Rule did not apply to Blue Violets’s application to the CRB and reversed the trial court’s decision.
[1] The TOA Rule is codified within N.J.S.A. 40:55D-10.5.
[2] See Hoboken, N.J. Code §36-4(A).
[3] See Hoboken, N.J. Code §196-33.1(I).
[4] HRC was a non-profit corporation formed by residents and taxpayers of the City. HRC’s principal would later intervene on behalf of the HRC and assert the same arguments within her amended complaint.
[5] Blue Violets submitted its application to the Planning Board on April 28, 2022 (one day after the Ordinance went into effect). The Planning Board did not accept Blue Violets’s application until July 7, 2022.
[6] See N.J.S.A. 40:55D-10.5.
[7] Id.
[8] S. Cmty. & Urban Affairs Comm. Statement to S. 82 (2010).
[9] Jai Sai Ram, LLC v. Planning/Zoning Bd., 446 N.J. Super. 338, 345 (App. Div. 2016).
[10] Id.
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