Judge rules conflict of interest enough to overturn townhouse OK Planning board’s unanimous approval thrown out.

BRADLEY BEACH — Monmouth County Superior Court Judge Thomas F. Scully reversed the decision of the Bradley Beach Planning Board that approved the plans of borough developer John Naples, of JRN Home Builders, LLC, to build a three-unit townhouse on Mr. Naples’ property at 111 Ocean Park Ave. in his written decision dated Wednesday, March 26.
Judge Scully reversed the approval, and remanded for a new hearing of the entire application. In the new hearing, Michael Conoscenti, zoning board chairman, will not participate, because of the “inescapable conclusion” that there was, at the very least, a potential conflict of interest in Mr. Conoscenti deliberating on the case, Judge Scully stated.
The written opinion did not address the “substantive” issues related to the application, meaning the validity of the townhouse design plan itself, which required 10 bulk variances, because, Judge Scully stated, the matter has to be reheard entirely anyway by virtue of the conflict of interest.
Mr. Conoscenti sat on the planning board during the initial hearing of Mr. Naples’s application on Jan. 24, 2013, because an inadequate number of planning board members were present at the meeting.
Mr. Conoscenti sat at the second hearing on Feb. 28, when he voted to approve the plans. The approval was unanimous.
There has only been one other successful appeal of a planning or zoning board decision in the borough since at least 1994, according to Fran Sauta, current secretary of both those boards.
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“It is very rare,” Ms. Sauta stated.
The other successful instance more than one decade ago involved property owner Rosemarie Sellick, who sought to subdivide her single lot at 300 Third Ave. into three, and to remove a house there, but was denied by the planning board in 2003. After three years in the appeals process, by county superior court order, the board approved Ms. Sellick’s request on Dec. 14, 2006, according to borough records.
A CONFLICT OF INTEREST
The planning board, prior to hearing Mr. Naples’ application, had requested that zoning board members sit on the applications scheduled for the Jan. 24, 2013, meeting, due to the anticipated absence of four of its members.
State statute gives permission for members of the zoning board to fill in, temporarily, on the planning board in the event there are too few members available for a quorum.
As per this request, Mr. Conoscenti and zoning board member George Bachar agreed to be on deck to serve as substitutes.
In advance of Mr. Naples’ first hearing, Mayor Gary Engelstad said he felt there would be a conflict of interest if he heard the case, and recused himself.
The mayor’s rationale for seeking to be replaced in this matter was his concern that Mr. Naples had previously made a $50 campaign contribution to his 2012 mayoral campaign.
The entire issue arose because Mr. Conoscenti was asked to participate because Mayor Engelstad recused himself, Judge Scully found.
Judge Scully wrote, “Ironically it is that concern [of Mayor Engelstad] for a conflict or perception of a potential conflict that initiated the involvement of Mr. Conoscenti in this application.”
Mr. Conoscenti’s prior business relationship with Mr. Naples involved significantly more money than $50.
Mr. Conoscenti and Mr. Naples were two of six members of 1014 Main Street, LLC, a limited liability company which purchased $2 million of real estate in the borough in March 2006 for the purpose of developing 20 condominium units.
As recently as August 2010, Mr. Naples, pursuant to a mortgage and note agreement, borrowed $100,000 from Mr. Conoscenti and the underlying mortgage was discharged in September 2011, according to the court ruling.
Mr. Naples used the loan to purchase one available retail space in the Sylvan Lake condos, which he now uses for his construction business, Mr. Conoscenti has said.
Despite their prior business history, which was formally terminated 15 months before the hearings, neither Mr. Naples nor Mr. Conoscenti brought this potential issue to the attention of any of the parties prior to the hearings.
“It is particularly troubling in this case that the response to the assertion of a claim of a conflict here is essentially that if they plaintiff were aware of such a conflict, it was his duty to assert it or be forever barred,” Judge Scully wrote.
If the mayor was concerned with a campaign contribution of $50, Mr. Naples and Mr. Conoscenti “should have been concerned” as well, Judge Scully ruled, considering the nature of their business relationship, geographic location of the projects they shared and the financial obligation thereafter.
The board’s approval of the three, three-story townhouses at 111 Ocean Park Ave. has been reversed and Mr. Naples’ application has been remanded for a new hearing.
As of yesterday, Mr. Naples had not refiled his application with the board, according to Ms. Sauta.
REACTIONS TO THE OUTCOME
Mr. Conoscenti and Mr. Naples declined to comment on the ruling and how they will proceed from this point.
“There is nothing I can say right now,” Mr. Conoscenti stated.
Lead plaintiff George Heflich, residing at 115 Ocean Park Ave., said he was “very pleased” with the decision, but dismayed that he and his neighbors had to take legal action to reach this end. The case cost Mr. Heflich, personally, $14,126 in legal and planning fees, he said.
“It has been a sad time for Bradley Beach when 19 townspeople have to sue their own planning board to protect their property rights. These are supposed to be secure in the borough ordinances enacted to safeguard us,” he said.
Mr. Heflich hired an attorney and planner to testify against Mr. Naples’ proposal during the second session of the hearing before the planning board. According to Mr. Heflich’s testimony that evening, his concerns included that Mr. Naples’ proposal was inconsistent with the character of the neighborhood and threatened the area with overdevelopment. He voiced disapproval for the quantity of variances requested to build townhouses in a neighborhood where the ordinances prohibit them because the lot is only one quarter of the minimum size allowed by ordinance.
Like Judge Scully, Mr. Heflich said he found the contention of the planning board that it was the public’s duty to root out and disclose the planning board’s conflicts of interest, and not their own duty, to be “very distressing.”
“Either the planning board and their lawyer are truly uninformed of these basic legalities, or they choose to ignore them. It is very distressing, either way,” he said.
Mr. Heflich called for the governing body to bring in new blood.
“We are now relying on the mayor and council to appoint new members to this board so that this never happens again,” Mr. Heflich said.
Mr. Heflich said he is concerned about potential changes to the borough’s master plan, which is currently undergoing re-examination, a process that occurs every 10 years.
“The town is additionally proposing an ordinance change to open up even more small lots for townhouse development,” he stated.
Mr. Heflich finished, “There have been positive results from all of this. Scores of residents have met and come together and we now attend town meetings to voice our concerns. We love our town and want to see it stay the beautiful, quaint Shore town that it has always been.”
Mayor Engelstad did not immediately return a call for comment.