FIRST AVENUE REALTY, LLC VS. THE CITY OF ASBURY PARK(L-402-14, MONMOUTH COUNTY AND STATEWIDE), A-2603-15T2

Background

Plaintiff First Avenue Realty owned a 32-unit apartment building in Asbury Park located in an area designated "blighted" and subject to the City's 2002 Waterfront Redevelopment Plan (the Plan).
Plaintiff obtained 2008 permits to perform repairs; storm damage and ensuing inspection led the City to issue a stop-work order and find plaintiff had exceeded permitted work.
The City’s zoning official determined the proposed work constituted "redevelopment" under the LRHL, denied new permits, and required plaintiff to obtain subsequent-developer status under the Redeveloper and Land Disposition Agreement with master developer Asbury Partners (including payment of an off-site infrastructure fee).
Plaintiff did not pursue administrative appeals; instead it filed suit in state court, voluntarily dismissed that action under a consent order for failure to exhaust administrative remedies, then sued again in federal court (which was dismissed with prejudice), and later filed the instant state-court complaint seeking damages.
Defendants moved to dismiss for failure to exhaust administrative remedies and noncompliance with the Agreement; the trial court granted dismissal, concluding the work was redevelopment and plaintiff was required to follow the Plan’s procedures.
The Appellate Division affirmed, applying the exhaustion doctrine and rejecting plaintiff’s arguments (including futility, estoppel, inverse condemnation exception, and a claim that Asbury Partners was a state actor).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether complaint should be dismissed for failure to exhaust administrative remedies	Plaintiff argued exhaustion was not required or would be futile and raised constitutional/tort claims	Defendants argued plaintiff admitted failure to exhaust and was required to use the Plan’s administrative process	Dismissal affirmed; exhaustion required and exceptions did not apply
Whether the work constituted "redevelopment" triggering subsequent-developer requirements	Plaintiff contended its repairs were routine and not subject to redevelopment controls	Defendants maintained the Plan governs and the work fit the Plan’s redevelopment definition	Court held the work properly characterized as redevelopment and subject to Agreement requirements
Whether futility or other exceptions to exhaustion applied	Plaintiff argued administrative remedies would be futile and that urgent relief or pure legal questions obviated exhaustion	Defendants argued uncertainty of success is not futility and no other exception applied	Court rejected futility and other exceptions (no irreparable harm, no pure legal question)
Whether dismissal standard was met on the pleadings	Plaintiff argued the complaint stated claims and dismissal standards were not satisfied	Defendants argued pleadings failed to show compliance with procedural/substantive Plan requirements	Court applied plenary review, found complaint failed to state a basis to avoid the Agreement/Plan requirements, and affirmed dismissal

Key Cases Cited

Jersey Urban Renewal, LLC v. City of Asbury Park, 377 N.J. Super. 232 (App. Div. 2005) (upholding denial where owner failed to obtain subsequent-developer status under redevelopment plan)
Hernandez v. Overlook Hosp., 149 N.J. 68 (1997) (discusses exhaustion doctrine and exceptions)
Garrow v. Elizabeth Gen. Hosp. & Dispensary, 79 N.J. 549 (1979) (grounds and purposes of administrative exhaustion)
Printing Mart-Morristown v. Sharp Elec. Corp., 116 N.J. 739 (1989) (pleading standard; afford every reasonable inference and search pleadings liberally)
Rezem Family Assocs., LP v. Borough of Millstone, 423 N.J. Super. 103 (App. Div. 2011) (standard of review for dismissal motions)