Affordable Housing and Cigna Property Update

Borough is challenging new affordable housing legislation
On March 20, 2024, Governor Murphy signed legislation into law, P.L. 2024, c.2 (“the Law”) which amends the Fair Housing Act to, among other things, abolish the New Jersey Council On Affordable Housing and establish a new statutory scheme for how municipalities calculate, certify, challenge and implement their constitutional affordable housing obligations.  
The Law is problematic in many respects, including:
  • It imposes housing obligations which go beyond what is constitutionally required as per the landmark Mt. Laurel decisions;
  • It imposes impermissible costs on municipalities in violation of constitutional protections from unfunded mandates; and
  • It gives extensive authority to a newly formed “Affordable Housing Dispute Program,” an appointed panel of current and retired judges, as well as potentially other “qualified experts,” which, among other procedural and substantive issues, impermissibly moves affordable housing determinations from the executive branch to the court. 
The Franklin Lakes Mayor and Council has decided to join two separate challenges to the Law, as follows:
  • Council on Local Mandates Complaint – The Borough is joining with several other towns (9 at last count) in filing a Complaint challenging the Law as an unconstitutional unfunded mandate (see N.J. Const., art VIII, §II, ¶5(a)). This initiative, spearheaded by the Borough of Madison, alleges that the Law is an unfunded mandate in violation of the New Jersey Constitution because it does not authorize resources, other than municipal property taxes, to offset the additional direct expenditures required for its implementation.
  • Superior Court Challenge – The Borough is joining several other towns (21 at last count) as a plaintiff in a lawsuit challenging the validity of the Law on several grounds, including all three bases for a challenge outlined above. The Borough is entering into an Agreement with the Borough of Madison whereby the Borough will contribute towards the legal expenses to be incurred in this litigation.   
Cigna Property Update
The Borough’s settlements with the developer, SHG Franklin Lakes, LLC, and the Fair Share Housing Center, for the development of the 88 acre property owned by Cigna, located on Parsons Pond Road (off of Old Mill Road), were implemented with the adoption in November 2023 of Ordinance No. 1927, which re-zoned the property to permit:
  • The construction of 495 multi-family housing units by SHG, which would include 62 units of affordable housing;
  • The construction of 70,000 square feet of retail and office development by SHG;
  • The transfer of 3.5 acres of property by SHG to the Borough for the construction of 65 units which will produce 71 affordable housing credits; and
  • The construction by SHG of a “federal use” in lieu of 245 (of the 495) multi-family housing units – under this alternative, the site would be developed with a federal use, which would not be a warehouse use, and 250 multi-family units, in addition to the Borough’s 62 affordable housing units. 
Subsequent to the adoption of Ordinance No. 1927, three lawsuits were filed challenging the ordinance and/or the Settlement Agreements. On October 1, 2024, the Mayor and Council adopted Ordinance No. 1964, which amends the zoning for the Cigna site to implement changes which will settle the three legal challenges. Ordinance No. 1964 includes the following substantive changes to the 2023 zoning (Ordinance No. 1927) of the Cigna property:
  • Elimination of the “federal use” as a permitted use on the property;
  • The property will not be occupied by a user that has a high traffic drive-thru component;
  • Deliveries by tractor trailers to commercial tenants will generally be restricted to occur between 7:00 am and 10:00 pm;
  • Prohibition of liquor stores or bars except as an accessory use to a related principal use, and prohibit cannabis or smoke shops;
  • Prohibition of warehouse use; and
  • Requires loading areas for commercial tenants be located no closer than 100 feet from a perimeter property line boundary.  
With the revisions to the ordinance, it is anticipated that all objector groups will dismiss their pending challenges, with prejudice, which will conclude the matters and resolve all outstanding disputes as it relates to the Cigna property.   
The Borough will now be issuing a Request for Proposals for the design and construction of the Borough’s municipally-sponsored 100% affordable housing project.
Though there is no specific timetable, it is anticipated that SHG will be filing a development application before the Borough’s Planning Board in the next few months.
The Borough will continue providing periodic updates on the status of the Borough’s challenges to the affordable housing legislation and the development of the Cigna property.