Developers and commercial property owners have long understood that approval of a land-use application requires more than a well-designed plan. In today’s world of shrinking budgets, applicants often feel tempted, if not coerced, to “support” the community by donating amenities or funds as part of the approval process. Despite such pressure, applicants should try to refrain from offering any public benefit, since it could later be construed as a quid pro quo arrangement and be grounds for invalidating an approval.

In Pond Run Watershed Association v. Township of Hamilton Zoning Board of Adjustment, the Appellate Division reversed an approval for a mixed-use project on a 10.9-acre site consisting of 119 age-restricted units, two retail buildings and a restaurant. As part of the approval, which did not include on-site recreational amenities, the applicant agreed to pay $476,000 to the Township to build an amphitheatre in a municipal park. During the hearings, the township administrator confirmed that the contribution had been negotiated with the applicant and that it was considered an integral part of the mayor’s plan to revitalize the park.

The court overturned the approval in part because it concluded that the contribution was an illegal exaction. The court also concluded that this contribution was a major feature of the approval process. As a result, in lieu of simply excising this condition, the court invalidated the entire approval, finding the quid pro quo arrangement had tainted the process.

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