New Jersey-2024-A2757-Introduced

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, post-World War II development of New Jersey was based upon an automobile-dependent economy and lifestyle, and led to the proliferation of large regional shopping malls and suburban office parks.

c. While, for decades, large regional shopping malls and suburban office parks prospered, and enabled New Jersey to prosper, these old single-use forms of development are now in such significant decline throughout the State and the country that academics and planners have termed them "stranded assets."

d. Rutgers University professors, James W. Hughes and Joseph J. Seneca, in their 2015 publication "New Jersey's Postsuburban Economy," explain that just as New Jersey successfully evolved from an urban manufacturing-based economy to a suburbanized information-age, and research-driven economy, societal changes are again challenging the State to reinvent itself.

e. As the post-war baby boom, suburban-centric workforce declines, and is replaced by a new generation comprised of echo boomers and millennials, the preferences of the new generation are causing corporations to leave regional shopping malls and suburban office parks behind, and to locate in places that are attractive for the new workforce.

f. Millennials are driving these changes because there are so many of them. People between 20 and 36 years old outnumber every other generation in the country. Businesses want to hire them, sell to them, or both. While in a former day, it was common for employees to relocate to secure employment, today it is more and more common for companies to relocate to areas in which millennials want to live, work, and play.

g. According to Professors Hughes and Seneca, the new workforce does not find the car-culture suburbs in which they grew up an attractive place to live, work and play. "Density, walkability, public transit, work-life balance, and urban amenities have grown significantly as quality-of-life locational attractions. Suddenly, New Jersey's greatest core advantage in the late twentieth century - a suburban-dominated, automobile-dependent economy and lifestyle - is regarded as a disadvantage.

h. PlanSmart NJ's 2016 publication, "A Guide to the Future: Repurposing Stranded Assets and Revitalizing New Jersey's Suburbs," states that "technological advances and changing societal demands have eroded the suburbs' attractiveness to residents and corporations leaving behind large isolated and underutilized buildings, or 'stranded assets,' which no longer act as economic engines."

i. While the new workforce and employers alike want to locate in livable walkable mixed-use communities, in which employees can have a range of amenities within walking distance of work and home, it is possible and desirable to repurpose stranded office parks and shopping malls into mixed-use communities.

j. One significant impediment to repurposing stranded assets into mixed-use communities are outdated, rigid zoning regulations that often separate residential and commercial uses from each other.

k. According to the PlanSmart NJ report, "[z]oning ordinances in suburban towns almost universally limit opportunities for mixed use walkable designs because of the Euclidean template where uses are rigorously separated. . . . In fact, single-use zoning ordinances often 'unintentionally stand in the way of providing developers, employers, and workers the types of modern spaces they desire,' therefore, 'inhibiting a community's economic competitiveness.'"

l. In order to encourage developers to repurpose stranded assets, it is appropriate for the Legislature to temporarily preempt local use restrictions that stand in the way of attempts to redevelop stranded single-use regional shopping centers and office parks into vibrant, desirable, mixed-use communities.

2. a. As used in this section:

"Eligible property" means a property that is:

(1) an office park of at least 50,000 square feet or a retail center of at least 15,000 square feet, which office park or retail center has a vacancy rate of at least 40 percent;

(2) within an area designated pursuant to P.L.1985, c.398 (C.52:18A-196 et seq.) as Planning Area 1, Planning Area 2, or as a designated center, or that is within one mile of a transit station or central business district;

(3) within a Department of Environmental Protection sewer service area; and

(4) not in or adjacent to:

(a) a landfill,

(b) an active garbage dump,

(d) a power plant,

(e) an oil or chemical refinery,

(f) an unremedied hazardous discharge site included on the National Priorities List of hazardous discharge sites adopted by the United States Environmental Protection Agency pursuant to the "Comprehensive Environmental Response, Compensation, and Liability Act of 1980," Pub.L.96-510 (42 U.S.C. s.9601 et seq.) or toxic waste site, as identified by either the United States Environmental Protection Agency or the Department of Environmental Protection,

(g) a jail or prison,

(h) a wastewater treatment facility, or

(i) a heavy industrial use, including a large warehouse distribution facility.

"Mixed-use development" means a development which integrates non-residential development, such as retail, office, or recreational uses, with residential uses.

b. A mixed-use development 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 mixed-use development is the subject of an application for development to convert an eligible property to a mixed-use development, the application for development is submitted for approval prior to the first day of the 25th month next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and the application for development complies with the following requirements:

(1) the application proposes to either:

(a) reuse the existing building or buildings without expanding the square footage of the building or buildings on the eligible property,

(b) redevelop the eligible property without expanding the square footage of the building or buildings on the eligible property, or

(c) extend beyond the existing square footage of the building footprint, provided the development increases the ability of the site to accomplish more than one of the following: (i) manage stormwater through the use of green infrastructure and natural systems, (ii) increases the tree canopy, or (iii) increases street grid connectivity;

(2) if the application for development proposes new residential units, at least 20 percent of the residential units constructed shall be reserved as low income housing, moderate income housing, or very low income housing, as those terms are defined in section 4 of P.L.1985, c.222 (C.52:27D-304). Of the units reserved as low income housing, moderate income housing, or very low income housing, at least 50 percent within each bedroom distribution shall be low income housing including at least 13 percent within each bedroom distribution as very low income housing, and the units shall be otherwise in compliance with the Uniform Housing Affordability Controls, adopted to implement P.L.1985, c.222 (52:27D-301 et seq.); and

(3) the application enhances the multimodal transportation connectivity of the area through the addition or enhancement of sidewalks, bicycle lanes, or other improvements.

c. The approving authority shall approve an application for development to convert an eligible property to a mixed-use development if the board determines that:

(1) the application can be granted without causing substantial detriment to the public good and without substantially impairing the intent and purpose of the zone plan and zoning ordinance, and

(2) the application complies with the other requirements of this section.

d. The approving authority may condition approval of an application for development to convert an eligible property to a mixed-use development upon complying with requirements for parking, water supply, sanitary sewer capacity, storm water management, bulk standards, and all reasonable site plan review, recreation, and design standards provided, however, that the height and setback limitations applicable to a converted mixed-use development shall be the greatest height and least restrictive setback limitations allowed within the zoning district under municipal ordinance or variance approved by the approving authority.

3. The Department of Community Affairs shall conduct an inventory of abandoned and underutilized retail centers, office parks, and other stranded assets, including but not limited to those that meet the definition of an "eligible property," as provided in subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill). Within 12 months following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the department shall provide a report to communicate the results of the inventory, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature. The department shall also provide access to the inventory on the department's Internet website. The department shall periodically update the inventory and the report, and shall provide information in its updates on the reuse of formerly stranded assets. The department may request the assistance of local officials in obtaining information for the initial report, and periodic updates.

4. This act shall take effect immediately.

STATEMENT

This bill would establish a limited preemption from local zoning regulations for applications to convert certain office parks and retail centers into mixed-use developments. Office parks and retail shopping centers located within suburban parts of the State have been termed "stranded assets," in part because their reuse or redevelopment is restricted by zoning regulations which limit their development to a single land use.

This bill seeks to initiate interest among property owners to develop these sites by establishing a two-year window of time within which a developer may submit an application to convert an eligible property into a mixed-use development without being constrained by outdated zoning ordinances. The bill defines "eligible property" as an office park of at least 50,000 square feet or a retail center of at least 15,000 square feet, which office park or retail center has a vacancy rate of at least 40 percent. Further, an eligible property includes only properties within Planning Areas 1 and 2, designated centers, within one mile of a transit center or central business district, and within a Department of Environmental Protection ("DEP") sewer service area. An eligible property does not include properties in or adjacent to a landfill, active garbage dump, trash incinerator, power plant, oil or chemical refinery, superfund site, jail, prison, wastewater treatment facility, or large warehouse distribution facility or other heavy industrial use.

The bill provides that a mixed-use development is a permitted use, which does not require a use variance, if the mixed-use development is the subject of an application for development to convert an eligible property to a mixed-use development, the application for development is submitted for approval within two years of the bill's effective date, and the application for development proposes to:

� reuse the existing building or buildings without expanding their square footage,

� redevelop the eligible property without expanding the square footage of the building or buildings on the eligible property, or

� extend beyond the building footprint square footage provided the development enhances a combination of stormwater management, the tree canopy, and street grid connectivity.

If an application for mixed-use development proposes new residential units, then the use variance-related benefits of the bill would also be conditional on at least 20 percent of the residential units constructed for owner-occupancy and 15 percent of the residential units constructed for rental occupancy being reserved as low income housing, moderate income housing, or very low income housing. The use variance-related benefits of the bill are also conditional on the application enhancing the multimodal transportation connectivity of the area through the addition or enhancement of sidewalks, bicycle lanes, or other improvements.

The bill would require a planning board or other approving authority to approve an application to convert an eligible property to a mixed-use development if the board determines that the application can be granted without causing substantial detriment to the public good and without substantially impairing the intent and purpose of the zone plan and zoning ordinance, and complies with the other requirements of the bill.

While freeing developers of these properties from municipal use restrictions, the bill retains local control over other aspects of the approval of an application to convert an eligible property to a mixed-use development. The bill specifically authorizes approving authorities to condition approval of an application to convert an eligible property to a mixed-use development upon complying with requirements for parking, water supply, sanitary sewer capacity, storm water management, bulk standards, and all reasonable site plan review, recreation, and design standards. However, the bill imposes one limitation on this grant of authority by providing that the height and setback limitations applicable to a converted mixed-use development will be the greatest height and least restrictive setback limitations allowed within the zoning district under municipal ordinance or variance approved by the approving authority.

Finally, the bill would direct the Department of Community Affairs ("DCA") to conduct an inventory of abandoned and underutilized retail centers, office parks, and other stranded assets, and report the results to the Legislature and the public within 12 months of the enactment of this bill. The bill directs DCA to periodically update the inventory and report.