S1766

An Act concerning the conversion of certain office parks and retail centers to mixed-use developments and supplementing chapter 55D of Title 40 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares:

a. New Jersey is one of the most suburban states in the country.

b. The rapid suburban-sprawl development of New Jersey after World War II coincided with a shift toward highway construction and automobile dependency and led to the proliferation of single-use commercial buildings such as large retail centers and office parks.

c. While, for decades, large retail centers and office parks provided economic and social benefits to New Jersey and its residents, their prevalence has been in sharp decline based on economic influences, consumer preferences, and retail and business alternatives. Many of these declining large retail centers and office parks are dated or vacant, such that academics and planners have deemed them to be "stranded assets. "

d. Workers and employers want to be located in mixed-use communities, which offer easy access to a range of residential, commercial, and recreational spaces and amenities within walking distance of each other. Converting stranded office parks and retail centers into desirable mixed-use communities would promote the general welfare by revitalizing underused or underperforming properties, creating new opportunities for housing, businesses, and recreational facilities, and bolstering the economic and social vitality of New Jersey’s municipalities.

e. One significant impediment to converting stranded retail centers and office parks into dynamic mixed-use communities is the application of outdated, rigid municipal zoning regulations that often separate residential and commercial uses from each other.

f. To encourage the development of vibrant and desirable mixed-use communities, further to the public good, it is appropriate for the Legislature to set standards to modernize local land use regulations that stand in the way of the repurposing and redevelopment of stranded retail centers and office parks.

2. a. As used in this section:

"Eligible property" means an office park or a retail center that meets the requirements of subsection c. of this section.

"Developer" shall have the same meaning as defined in section 34 of P.L.2008, c.46 (C.40:55D-8.3).

"Mixed-use development" shall have the same meaning as defined in section 34 of P.L.2008, c.46 (C.40:55D-8.3).

"Office park" means a non-residential land use developed as a single entity combining general, business, professional, or medical offices that contain ancillary personal services primarily for employees located on a single site and planned, developed, and managed as a unit.

"Retail center" means a non-residential land use developed as a single entity combining retail stores and potentially other commercial uses located on a single site and planned, developed, and managed as a unit.

"Vacancy rate" means the percentage of unoccupied or unused square footage in a structure or facility, compared to the total square footage of the structure or facility.

b. A municipal planning board enforcing municipal zoning regulations shall permit conversions or partial conversions of eligible properties into mixed-use developments pursuant to the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).

c. A developer of a proposed project to repurpose or redevelop a retail center or office park into a mixed-use development in accordance with the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) shall demonstrate that the retail center or office park located on the lot or land included in the application for development meets the following requirements to be deemed an eligible property:

(1) the office park is at least 50,000 square feet or the retail center is at least 15,000 square feet;

(2) (a) the office park or retail center has a vacancy rate of at least 25 percent for a continuous period of at least 18 months immediately preceding the application for development; or

(b) the office park or retail center has suffered an economic downturn over the three-year period immediately preceding the date of the application, as demonstrated by evidence of a quantifiable loss in revenue such that the developer’s expenses for the premises have exceeded revenues by 30 percent or more each year; and

(3) the owner of the property has made and maintained a continuous, good faith effort to redress the vacancy, actively rent, or actively market the property during the 18 months immediately preceding the application for development.

d. A mixed-use development that is the subject of an application for development to convert an eligible property shall be a permitted use and shall not require a use variance pursuant to subsection d. of section 57 of P.L.1975, c.291 (C.40:55D-70) if the application for development complies with the following requirements:

(1) the mixed-use development, which may include the demolition of existing structures, complies with the zoning requirements applicable to development projects within the municipality’s mixed-use zone as provided in subsection e. of this section;

(2) the application proposes to develop at least two types of uses as part of the mixed-use development, of which one use is residential, and no use shall be industrial;

(3) at least 20 percent of the residential units to be constructed shall be reserved as or very-low income housing, low-income housing, or moderate-income housing, as those terms are defined in section 4 of P.L.1985, c.222 (C.52:27D-304);

(4) of the residential units reserved as very low-income housing, low-income housing, or moderate-income housing, at least 50 percent within each bedroom distribution are low-income units, and at least 13 percent of the low-income units are very-low income units; and

(5) the residential units reserved as very low-income housing, low-income housing, or moderate-income housing comply with the Uniform Housing Affordability Controls, adopted to implement P.L.1985, c.222 (C.52:27D-301 et seq.).

e. (1) The municipal planning board shall approve an application to repurpose or redevelop an eligible property into a mixed-use development notwithstanding the eligible property’s location in the municipality if the project complies with the zoning requirements applicable to projects within the municipality’s mixed-use zone. If the municipality has multiple mixed-use zones in its zoning ordinance, the municipality shall designate which of its mixed-use zones’ regulations shall apply to mixed-use developments that meet the requirements of P.L. , c. (C. ) (pending before the Legislature as this bill).

(2) If the municipality’s zoning ordinance does not include a mixed-use zone, a mixed-use development that meets the requirements of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be subject to the following requirements:

(a) the height limitation of the mixed-use development shall be the greater of the height of the tallest existing building at the eligible property and the most permissive building height allowed by the municipal zoning ordinance within the zoning district in which the eligible property is located;

(b) the setback limitations applicable to the mixed-used development shall be the lesser of the setbacks of the existing buildings on the eligible property and the least restrictive setback limitations allowed by the municipal zoning ordinance within the zoning district in which the eligible property is located; and

(c) the maximum impervious coverage for the mixed-use development shall not be less than the greater of 125 percent of the existing impervious coverage on the eligible property, or the maximum impervious coverage allowed by municipal ordinance within the zoning district in which the eligible property is located.

f. Nothing herein shall limit or prohibit an applicant seeking to repurpose or redevelop an eligible property into a mixed-use development from requesting or receiving variances pursuant to section 57 of P.L.1975, c.291 (C.40:55D-70).

3. A project undertaken pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be eligible for long term tax exemption pursuant to the "Long Term Tax Exemption Law," P.L.1991 (C.40A:20-1 et seq.) and shall be deemed an "area in need of redevelopment" or an "area in need of rehabilitation" without consideration of the requirements of the "Local Redevelopment and Housing Law," P.L.1991, c.431 (C.40A:12A-1 et seq.).

4. The provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not prohibit or limit an applicant’s ability to apply and qualify for tax incentives, financing, or grants in order to supplement investments for projects undertaken pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill). Notwithstanding this provision, project eligibility for tax incentives, financing, or grants, or any other award, shall be determined by the respective awarding entity.

5. A development project and any municipal action undertaken pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) shall be in compliance with the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.) and all other applicable municipal zoning ordinance requirements that do not conflict with the requirements of P.L. , c. (C. ) (pending before the Legislature as this bill).

6. This act shall take effect immediately.

STATEMENT

This bill establishes a limited preemption from local zoning regulations for applications to convert certain office parks and retail centers that meet the eligibility requirements of the bill into mixed-used developments. A developer of a proposed project to repurpose or redevelop a retail center or office park into a mixed-use development is required to demonstrate that the retail center or office park located on the lot or land included in the application for development meets the following requirements to be deemed an eligible property:

(1) the office park is at least 50,000 square feet or the retail center is at least 15,000 square feet;

(2) (a) the office park or retail center has a vacancy rate of at least 25 percent for a continuous period of at least 18 months immediately preceding the application for development; or

(b) the office park or retail center has suffered an economic downturn over the three-year period immediately preceding the date of the application; and

(c) require that the owner of the property has made and maintained a continuous, good faith effort to redress the vacancy rate, actively rent, or actively market the property during the vacancy period set forth in the bill.

The bill provides that a mixed-use development that is the subject of an application for development to convert an eligible property is to be a permitted use and is not to require a use variance if the application for development complies with certain requirements provided in the bill.

The bill further provides that the municipal planning board is to approve an application to repurpose or redevelop an eligible property into a mixed-use development notwithstanding the eligible property’s location in the municipality, if the project complies with the zoning requirements applicable to projects within the municipality’s mixed-use zone. If the municipality has multiple mixed-use zones in its zoning ordinance, the municipality is to designate which of its mixed-use zones’ regulations are to apply to mixed-use developments that meet the requirements of the bill.

If the municipality’s zoning ordinance does not have a mixed-use zone, a development that meets the bill’s requirements is to be subject to certain other requirements provided in the bill.

A project undertaken pursuant to the bill is to be eligible for long term tax exemption pursuant to the "Long Term Tax Exemption Law," P.L.1991 (C.40A:20-1 et seq.) and is to be deemed an "area in need of redevelopment" or an "area in need of rehabilitation" without consideration of the requirements of the "Local Redevelopment and Housing Law," P.L.1991, c.431 (C.40A:12A-1 et seq.).

The provisions of the bill are not to prohibit or limit an applicant’s ability to apply and qualify for variances, tax incentives, financing, or grants.

A development project and any municipal action undertaken pursuant to the bill is to be in compliance with the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.) and all other applicable municipal zoning ordinance requirements.

The bill defines the term “vacancy rate” to mean the percentage of unoccupied or unused square footage in a structure or facility, compared to the total square footage of the structure or facility.