## Facts

- A multi-party development was proposed on a 540-acre site in Burlington County, spanning Moorestown and Mount Laurel Townships.
- Early planning treated related parcels as a single overall development that included mixed uses and a large office component.
- Traffic studies indicated that existing two-lane roads would require significant off-tract improvements, including roadway widening and intersection relocation.
- The Burlington County Planning Board granted conditional preliminary approval in 1989, conditioning approval on construction and/or funding of specified off-tract roadway improvements.
- Ownership and development rights later changed; Toll Bros., Inc. and Laurel Creek, L.P. became the developer responsible for satisfying the County’s approval conditions.
- Toll and the County executed a developer’s agreement requiring Toll to fund substantial off-tract roadway improvements as part of implementing the approval conditions.
- After entering the agreement, Toll significantly reduced the scope of the proposed development and sought recalculation and reduction of its off-tract obligation based on decreased traffic impacts.
- The County denied recalculation, asserting the developer’s agreement bound Toll to the originally negotiated obligations regardless of changed project scope.

## Issues

1. Whether a developer’s agreement may obligate a developer to pay more than its pro rata share of off-tract improvements when such an exaction could not be imposed under the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-42.
2. Whether off-tract improvement conditions must remain fully enforceable when the developer materially reduces the scope of the approved project.
3. Whether a developer’s agreement prevents application of a changed-circumstances analysis to off-tract improvement obligations otherwise governed by the MLUL.

## Decision

- The New Jersey Supreme Court reversed the Appellate Division and Law Division.
- The Court answered all three issues in the negative.
- The Court held that the MLUL’s proportionality limits cannot be exceeded through a developer’s agreement.
- The Court held that approval conditions for off-tract improvements are subject to reconsideration if a significant project reduction materially changes the public need generated by the development.
- The Court held that a developer’s agreement does not bar a developer from seeking MLUL-based relief, including a recalculation grounded in changed circumstances.
- The Court remanded to the County Planning Board for proceedings consistent with these holdings, allowing Toll the opportunity to attempt to prove a reduced proportional share.

## Legal Principles

- Under N.J.S.A. 40:55D-42, a planning board may require off-tract improvements only to the extent necessitated by the development and only in the developer’s pro rata share of the cost.
- A planning board acts unlawfully if it imposes an off-tract condition unrelated to development-generated needs or imposes an exaction exceeding proportional impact, even if the developer agreed in a separate developer’s agreement.
- A developer’s agreement is ancillary to land-use approval conditions and is enforceable only to the extent the underlying conditions are lawful under the MLUL.
- Conditions of approval are not fixed when a significant reduction in project scope materially changes the proportional effect of the public need generated by the development; the developer must be given an opportunity before the planning board to seek recalculation.

## Conclusion

The court held that statutory limits on off-tract improvement exactions under the MLUL cannot be bypassed by a negotiated developer’s agreement and that a major downsizing of a project requires the planning board to consider changed circumstances and reassess the developer’s proportional obligation.


Toll Bros., Inc. v. Bd. of Chosen Freeholders of Cnty. of Burlington, 194 N.J. 223, 944 A.2d 1 (2008)