By Stephen Appezzato
MIDDLETOWN – The future of the former Circus Liquors property remains up in the air following a recent court ruling. At the end of June, a New Jersey appeals court upheld a court decision that blocks Middletown Township from taking control of the 52-acre property along Route 35 for commercial redevelopment. The decision strengthens the potential developer’s efforts to build a 937-unit housing development on the property, consisting of market-priced and affordable dwellings.
The June 27 ruling allows developer AAMHMT Property LLC to proceed with a builder’s remedy lawsuit against Middletown and halts the township’s efforts to condemn the site and foster commercial development instead.
Builder’s remedy suits are filed by developers seeking to rezone a site for housing, a portion of which must be affordable units, asserting a municipality is not complying with state affordable housing laws.
In a statement to The Two River Times, Middletown Mayor Tony Perry said, “The township strongly disagrees with the court’s decision.”
“Unfortunately, the Appellate Court has only compounded the errors made by the lower court,” Perry said. “We will be petitioning the Supreme Court to protect the constitutional rights of municipalities – rights that are clearly enshrined in our Constitution, unlike the Mount Laurel doctrine, which was created by activist judges.”
At the heart of the dispute is New Jersey’s Mount Laurel doctrine, which requires municipalities to provide their fair share of affordable housing. According to the Appellate Court decision, AAMHMT, the contract purchaser of the property, filed its lawsuit in August 2023, claiming Middletown had failed to meet its third-round housing obligations and seeking to rezone the property for residential development. The developer cited a housing shortfall of approximately 1,026 units, dating back to 2000.
While 80 acres have already been developed by Toll Brothers into 350 townhomes, including 70 affordable units, AAMHMT plans to build a 937-unit residential project on the remaining space, comprising apartments and townhouses with some affordable housing units. The land was previously home to Circus Liquors and is still marked by the towering Calico the Clown sign.
History of Legal Actions
Days after the developer filed its lawsuit, the township took steps to assert control over the property. At the time, Middletown adopted resolutions authorizing an investigation of the site to determine if it should be designated an area in need of redevelopment for condemnation purposes, and designated Duva Development, LLC, a separate developer, as the official redeveloper of the Circus Liquors site. In September, the township passed an ordinance stating site plan applications could not be submitted unless the applicant was the town’s designated redeveloper for the property.
In February 2024, Middletown formally declared the property an area in need of redevelopment for condemnation purposes, accepting the planning board’s recommendation.
In May 2024, the trial court ruled the township was not constitutionally compliant with its affordable housing obligations under the Mount Laurel doctrine. While the township estimated its shortfall at 600 units and the developer estimates it at around 1,000, “it is undisputed that the Township is not constitutionally compliant with its Third Round obligation,” the ruling states.
In June 2024, AAMHMT filed an order to show cause, seeking to block the township from taking further action to condemn the property, designating a redeveloper or granting any development approval for any purpose other than inclusionary housing. The courts upheld the decision in July.
The township appealed, but the Appellate Division recently sided with the lower court, writing, “The trial court did not abuse its discretion and made sufficient findings to support the preliminary restraint,” reaffirming the halt on Middletown’s condemnation actions.
‘Brazen’ Action by Township
The Fair Share Housing Center (FSHC), a nonprofit advocacy group working to realize and support affordable housing opportunities in New Jersey, intervened in the lawsuit. In a statement to The Two River Times, FSHC attorney Ariela Rutbeck-Goldman said, “Middletown’s attempt to use condemnation to take an affordable housing site off the table was one of the most brazen acts we have ever seen from a town – which is saying a lot.”
Rutbeck-Goldman, who argued the case in court, said the “resounding decision puts towns on notice that these types of attempts to circumvent the state’s affordable housing law will not be tolerated.”
According to its website, the FSHC “uses legal, policy, and community-building strategies to dismantle decades of racial and economic discrimination in New Jersey and nationally that excludes people from the opportunity to live in safe, healthy, and affordable housing.”
The case comes as New Jersey enters the fourth round of its Mount Laurel affordable housing obligations, which began July 1 and outlines compliance goals for the next decade.
The final outcome of AAMHMT’s builder’s remedy lawsuit is pending, but for now, the court’s ruling ensures the township cannot move forward with plans to commercially redevelop the property. This could be overruled by the State Supreme Court if it sides with Middletown.
The article originally appeared in the July 10 – July 16, 2025 print edition of The Two River Times.
