New Jersey Court Invalidates Exaction for Sidewalks

In a recent unpublished decision, Jerman v. Township of Berkeley, a New Jersey trial court held invalid an ordinance which required the construction of sidewalks and curbs as a condition of subdivision or site plan approval, or the payment of a fee in lieu of constructing these improvements. The decision serves as a reminder that the legal authority for municipalities to impose exactions is strictly limited as provided by statute, and requires a “rational nexus” between the project and the need for the improvement.

The ordinance at issue, enacted by the Township of Berkeley in Ocean County and codified at § 2.94 of the Township Code, requires the installation of sidewalks and curbing along all street frontages as a condition of any subdivision or site plan approval. It further authorizes the Planning Board or Zoning Board of Adjustment to waive the construction of sidewalks and curbing, subject to the applicant instead making a payment, in an amount equal to the cost of installing these improvements, to the Township’s Pedestrian Safety Fund to be used for unspecified future pedestrian safety projects. The ordinance establishes certain factors that the board must consider in determining whether to grant a waiver, including the presence or absence of curbing in the vicinity of the subject property, practical difficulty in installing sidewalks and curbing due to conditions such as exceptional topographical characteristics or drainage concerns, and the recommendations of the reviewing engineer. However, the ordinance expressly provides that the board is without authority to waive the installation of the improvements and also waive the payment of the fee, but creates a mechanism whereby a developer can appeal to the Township Council for relief from the obligation of making the payment to the Pedestrian Safety Fund.

The court, noting that the Municipal Land Use Law, N.J.S.A. 40:55D-42, provides for developers to pay their “pro-rata share of the cost of providing only reasonable and necessary street improvements and water, sewerage and drainage facilities, and easements therefore, located off-tract but necessitated or required by construction or improvements within such subdivision or development,” found lacking the required “rational nexus” between the needs created by the project, the benefits accruing to the development, and the cost of the improvements. The court was also troubled by the burden placed on developers to make a monetary contribution for improvements which the reviewing board found to be “either unwarranted or unnecessary.” Accordingly, the court concluded that “the Ordinance imposes unlawful exactions on developers by requiring them to pay a ‘disproportionate share of the cost of improvements that also benefit other persons.’” As a result, the court invalidated the ordinance as exceeding a municipality’s authority under the Municipal Land Use Law.

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