NOT FOR PUBLICATION

PER CURIAM.

Appellants Veramax, L.P., and DTF Development, L.P., appeal from the final agency decision of the New Jersey Housing and Mortgage Finance Agency's (HMFA) Tax Credit Committee (TCC) denying reconsideration of its award of federal low-income housing tax credits (LIHTC) and Tax Credit Assistance Program (TCAP) subsidy funding for respondent Community Investment Strategies, Inc.'s (CIS) project. Appellants argue that CIS should not have received the tax credits and subsidy because its project was not a "rehabilitation" project as required by the criteria for the award, and because CIS did not submit the proper documentation required of applicants for the LIHTC and TCAP subsidy. Having reviewed the record in light of appellant's arguments, we conclude that the TCC did not act arbitrarily or capriciously when it determined that appellants would not have received the LIHTC and TCAP cap subsidy even if CIS's project had not received them, and the challenge to the award on other grounds is moot. We affirm.

I.

New Jersey's Fair Housing Act, N.J.S.A. 52:27D-301 to 329.19, charges the HMFA with the responsibility of establishing "affordable housing programs to assist municipalities in meeting the obligation . . . to provide low and moderate income housing." N.J.S.A. 52:27D-321. As part of that responsibility, HMFA administers the federal government's low-income housing credit program, 26 U.S.C.A. § 42, which "provides an incentive for the construction and rehabilitation of low income rental housing by lowering its overall cost through the use of tax credits to developers and owners of qualified rental projects." In re 2003 Low Income Housing Tax Credit QAP, 369 N.J.Super. 2, 11 (App. Div.), certif. denied, 182 N.J. 141 (2004). "The program is popular and desirable for developers of low income housing and there is competition for the limited number of awards available." In re Tax Credit Application of Pennrose Props. Inc., 346 N.J.Super. 479, 485 (App. Div. 2002).

The federal regulations require HMFA to adopt a "qualified allocation plan" (QAP). 26 U.S.C.A. § 42(m)(1)(a). Accordingly, each year HMFA establishes a QAP that includes funding cycles and the amount of credits available in each cycle. N.J.A.C. 5:80-33.1 to 33.3. In 2009, the cycles were the Family Cycle, the Senior Cycle, the Supportive Housing Cycle, and the "Final Cycle". This appeal, involves the 2009 Final Cycle. The QAP for the 2009 Final Cycle required that credits be reserved for the highest-ranking eligible application for a preservation project.

The LIHTCs for 2009 were significant not only because of the tax credits themselves, but also because they could serve to qualify a project for funding under a federal government TCAP. On May 28, 2009, HMFA's Board announced the selection criteria for the TCAP. The Board explained:

The Board also explained that "[p]rojects eligible to receive TCAP assistance are rental housing projects that received or will receive an award of LIHTCs . . . during the period from October 1, 2006 to September 30, 2009 (federal fiscal years 2007, 2008 or 2009), and require additional funding. . ." (emphasis added).

On August 5, 2009, appellants jointly submitted a 2009 LIHTC application and TCAP funding request for a project known as Belmont Apartments. The same month, CIS submitted an application, as did four other developers. The applicants' projects were ranked according to a self-implemented scoring system that required each applicant to complete a self-score sheet with the application. N.J.A.C. 5:80-33.14. Based on the self-determined rankings, HMFA examined the applications of the projects "that rank[ed] sufficiently high to receive credits." N.J.S.A. 5:80-33.14.

According to the self-determined rankings, CIS's Whitney Crescent Project, with a score of sixty-two, ranked first. Whitney Crescent was an eight-unit affordable-housing project in Glassboro that CIS proposed to demolish in phases, and replace with new rental apartments in two-story buildings. Appellants' project tied for second place with a project called Broadway Townhouse. Each scored fifty-eight. The projects that scored below appellants' project were Regency Park Apartments, fifty-seven; Ferry Family Residences, fifty-three; and Kinder Towers, fifty.

At that the TCC's meeting of September 30, 2009, the TCC awarded its 2009 Final Cycle Tax Credits and TCAP subsidy. Having credits and funds to approve only one project, the TCC made the award to CIS for its Whitney Crescent project. The TCC verbally notified appellants of its decision the same day, and confirmed its decision in a letter dated October 15, 2009.

On October 13, 2009, appellants wrote to HMFA and requested "pursuant to N.J.A.C. 5:80-33.22(c)" that the TCC reconsider its decision.1 Appellants' letter asserted, in pertinent part:

The Application scored fifty-eight . . . points, four . . . less than that of the successful applicant, [CIS], which upon information and belief sought tax credits for a new construction project, Whitney Crescent. The application submitted by [CIS], however, was solely for "New Construction." Therefore, Community Investment Strategies should not be awarded tax credits under the preservation set-aside because their project is solely concerned with new construction and does not propose to preserve/rehabilitate any existing projects. On the contrary, Veramax and DTF seek to preserve existing projects in addition to building new construction.

The TCC considered appellants' request for reconsideration at its December 29, 2009 meeting. It determined that appellants had inaccurately listed their score as fifty-eight, rather than fifty-seven, and that the score of fifty-seven placed them in a tie for third place in the rankings.

Appellants again argued that CIS's project did not qualify as a preservation project because it involved new construction. They made the additional argument, omitted from their letter seeking reconsideration, that CIS had not submitted a Capital Needs assessment. The TCC reserved its decision. On March 22, 2010, appellants requested that the TCC render a decision. On May 19, 2010, the TCC issued its final agency decision denying appellants' appeal.

In its decision, the TCC did not resolve appellants' argument that CIS's Whitney Crescent project was not a "preservation project" within the QAP because it was comprised solely of demolition and new construction. Rather, the TCC noted that appellants "did not challenge the qualifications, scoring or ranking of the project submitted by any of the other five applicants." The TCC explained that it did not affirmatively deny tax credits to appellants but rather "found that only one project could be fully funded through the LIHTC reserved for that cycle and awarded the tax credits to Whitney Crescent, a project that ranked higher than Belmont[.]"2

Next, the TCC noted that the QAP "set aside LIHTC for the 2009 Final Cycle and gave funding preference to the highest ranking `preservation project.'" After considering the regulatory definition of "preservation project" found in N.J.A.C. 5:80-33.2 and 33.7(a), the TCC observed that "the QAP does not specify, nor limit, the eligibility of a project based on its plans to incorporate new construction, rehabilitation, or some combination thereof."3

The TCC also explained that "[s]imultaneously with the award of tax credits in the 2009 Final Cycle, the [TCC] also considered competitive applications for subsidy funds from the [TCAP]." Because appellants had not received an award of tax credits through the 2009 Final Cycle, they did not qualify to receive TCAP funds. The TCC noted that appellants had not challenged that determination.

The TCC next analyzed the scoring of the applications and concluded that appellants would not have received the LIHTC credits even if CIS's Whitney Crescent project had not qualified. The TCC concluded that appellants' project "did not rank sufficiently high in comparison to the other projects in the 2009 Final Cycle to receive an award of tax credits on September 30, 2009." The TCC also concluded that as of October 1, 2009, appellants' "Final Cycle application could not support a finding that the Project was financially feasible."

The TCC acknowledged appellants had submitted an amended score sheet with a one-point deduction that reduced their score from fifty-eight to fifty-seven points. The TCC then explained that "after performance of HMFA staff verification," it could not sustain appellants' score of fifty-seven, and that the score should have been lower for two reasons. First, a mortgage commitment letter had been signed by a person who was not "a principal of the applicant nor an authorized signatory listed in the application." Second, the TCC rejected appellants' claim in their application that "at least [thirty percent] of the tax credit units are large family units." The resulting one-point deduction for the unauthorized signature and seven-point deduction for the large family units reduced appellants' score to forty-nine points.

The TCC also determined that the score for the Broadway Townhouse project should be reduced from fifty-eight to fifty-five, and that the project might not be financially feasible due to its being underwritten on a short-term financing source. Regency Park's score of fifty-seven, however, was accurate and not subject to reduction. Consequently, even if the Whitney Crescent project were disqualified, appellants' project would not receive the LIHTC.4

The TCC declined to decide whether a preservation project could be comprised, in whole or in part, of new construction, because the issue was moot, and the TCC refused to issue an advisory opinion. Appellants filed a notice of appeal and requested that the TCC stay their determination pending the appeal. The TCC denied appellants' application for a stay. Appellants did not seek a stay from this Court.

II.

On appeal, appellants renew their contentions that Whitney Crescent did not qualify as a preservation project and that CIS did not include a capital needs analysis in its application. Appellants challenge the TCC's "circular reasoning" that their project was not financially feasible because it was ineligible for TCAP funding, having never received LIHTC credits. They also argue that their project would have received the highest score had the Whitney Crescent project been disqualified. While they accept the TCC's determination that the second highest scored project would be disqualified following point reductions, they quarrel with that same analysis when applied to their project. Specifically, they dispute that they should have lost a point because a principal did not counter-sign their mortgage commitment, and they further dispute that seven points should have been deducted because the project did not contain thirty percent "large family units" as they represented in their application. They argue that the latter reduction should not have been one-hundred percent, and they should have been awarded between three and seven points.

Lastly, appellants argue that even if they did not qualify for the LIHTC and TCAP subsidy, the Final Cycle Award to CIS for the Whitney Crescent project should be invalidated.

The TCC responds that it reasonably determined appellants' project would not have been the highest ranking preservation project even if Whitney Crescent had been disqualified. The TCC points out that appellants' self-determined score placed it in a tie for third place, and that appellants' would have ranked below the other third-place project based on a "tie breaker" analysis, because "the project needing `the least amount of tax credits per tax credit unit' would get funding priority." N.J.A.C. 5:80-33.19(a)1. The TCC further argues that it properly decided, upon further review following appellants' administrative appeal, that appellants' project was not financially feasible and that its self-determined score was inaccurate. The TCC emphasizes that appellants did not contest its finding that the four bedroom units they represented to be "large family units" under the QAP could not, in fact, qualify as large family units. Appellants' argument that they should have received credits for some of the "large family units" was never raised during the administrative proceedings.

Lastly, the TCC argues that because it is prohibited by federal law from providing TCAP funding to appellants, their project is not financially feasible. As to appellants' argument that the funding to Whitney Crescent should be rescinded, the TCC asserts that appellants lack standing to contest the award and, in any event, the issue is moot.

Respondent CIS argues that the TCC's determination in awarding the LIHTC credits and TCAP funding was not arbitrary, capricious, or unreasonable; rather, it was supported by sufficient credible evidence in the record and applicable law. CIS also argues that the TCC properly denied appellants' administrative appeal, and that the TCC's decision not to render an advisory opinion as to what constitutes a preservation project did not represent an abuse of discretion. Finally, CIS argues that the remedy appellants seek, namely, rescission of the tax credits and subsidy, is contrary to general principles of law and equity.

Our review of agency determinations is limited. In re Stallworth, 208 N.J. 182, 194 (2011). "In administrative law, the overarching informative principle guiding appellate review requires that courts defer to the specialized or technical expertise of the agency charged with administration of a regulatory system." In re Virtua-West Jersey Hosp. Voorhees for a Certificate of Need, 194 N.J. 413, 422 (2008). "Consistency with that principle demands that an appellate court . . . should not disturb an administrative agency's determinations or findings unless there is a clear showing that (1) the agency did not follow the law; (2) the decision was arbitrary, capricious, or unreasonable; or (3) the decision was not supported by substantial evidence." Ibid.

Further, "[i]t is settled that `[a]n administrative agency's interpretation of statutes and regulations within its implementing and enforcing responsibility is ordinarily entitled to our deference.'" Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J.Super. 52, 56 (App. Div. 2001) (quoting In re Appeal by Progressive Cas. Ins. Co., 307 N.J.Super. 93, 102 (App. Div. 1997)). "The burden of demonstrating that the agency's action was arbitrary, capricious or unreasonable rests upon the [party] challenging the administrative action." In re Arenas, 385 N.J.Super. 440, 443-44 (App. Div.), certif. denied, 188 N.J. 219 (2006).

We first address the TCC's determination that appellants would not have qualified for the LIHTC and TCAP subsidy even if CIS's project had been disqualified. Appellants have not carried their burden of demonstrating that the TCC's decision was arbitrary, capricious, or unreasonable.

Appellants challenge the TCC's deductions and the consequent reduction of their total score from fifty-seven to forty-nine.5 They first assert that because their principal was unavailable, HMFA directed them to submit a letter authorizing another person to sign the mortgage commitment. Unquestionably, the other person signed the mortgage commitment. The issue is whether appellants submitted with their application the letter granting that person authority to sign the mortgage commitment. Although appellants have submitted the authorization in their appellate appendix, the TCC asserts that the letter was never included with appellants' original application. Appellants do not assert in their brief that they submitted the letter with the initial application. They only assert that HMFA directed them to submit the letter. In their reply brief, appellants make no attempt to refute the TCC's argument that the authorization letter was not submitted with appellants' application.

More significantly, appellants now implicitly acknowledge that they are not entitled to seven points based on thirty percent of their units being large family units. Rather, they assert that N.J.A.C. 5:80-33.15(a)(3) provides that where some, not all, buildings in the development meet the thirty percent threshold, the development is awarded between three and seven points. For that reason, they claim they should have been awarded between three and seven points.

The relevant regulation permits an applicant to select one of the following — three or seven points — options:

The regulations define a "low-density" building as one with no more than four residential floors. N.J.A.C. 5:80-33.2. They define a "large family unit," in turn, as one

The buildings in appellant's project all qualify as "low-density," precluding any of the buildings from receiving points pursuant to N.J.A.C. 5:80-33.15(a)(3)(ii). Implicitly conceding they were not entitled to seven points, and not qualifying for three points for their low-density buildings, appellants argue that under the third subsection of the provision they are due a weighted average of points earned under the first two subsections. However, because none of their buildings qualify for any points under those subsections, the average is zero. The TCC did not abuse its discretion when it deducted all seven points.

Appellants also challenge the TCC's determination that their project was not financially feasible because they did not qualify for TCAP funds. They argue that if the TCC deems the LIHTC awarded as of September 30, 2010, the date the TCC initially made the award, then they would qualify for the TCAP subsidy.

As previously noted, HMFA's selection criteria specify that an "`award of tax credits,'" the prerequisite for additional TCAP funding, "shall be deemed awarded as of the date of the [TCC] meeting during which that project's awards/decisions are announced" (emphasis added). The TCC determined, based on the language of that criterion, that appellants could not rely on another project's award announcement to meet the TCAP deadline for their own project. That construction is not unreasonable. It promotes the prompt disbursal of funds meant to encourage the development of affordable housing and assure employment.

The TCC determined appellants would not have qualified for the LIHTC and TCAP funding. Appellants have not demonstrated that the TCC's decision was arbitrary, capricious, or unreasonable. Accordingly, we turn to appellants' argument that the LIHTC credits and TCAP funding should be rescinded because CIS was not a qualified applicant. We deem the issue to be moot.

The parties' dispute concerns 2009 administrative regulations required by, and adopted to implement, the federal government's low income housing credit program. More specifically, the parties' dispute requires an interpretation of the 2009 definition of "preservation project," which includes other technical terms of art, and which makes no reference to new construction. The question raised by the parties' dispute cannot recur because the administrative regulation has since been amended and now specifically states: "In order to qualify for the preservation set-aside, the proposal must be for the rehabilitation of [one-hundred] percent of the affordable units and no demolition of the existing building is permitted." N.J.A.C. 5:80-33.2. Because the interpretation of an administrative regulation utilized by a state agency to implement a federal program in a specialized field requires, in the first instance, interpretation by the agency, we would be obliged to remand this case to HMFA. Doing so would require HMFA to interpret a regulation that is no longer in effect, and which has no applicability to the current award of LIHTC awards, for the purpose of retrospectively evaluating an award and subsidies that cannot be reallocated. Moreover, appellants have cited no authority to suggest that the HMFA can rescind either the award of LIHTCs or TCAP subsidies after a project that initially qualified has been commenced or completed.

Perhaps, most significantly, CIS relied upon the TCC's decision to obtain financing and construct their project. Cf. Murnick v. N.J. Housing & Mortg. Finance Agency, 309 N.J.Super. 292, 298 (App. Div. 1998) (dismissing the plaintiff's appeal as moot because the relief plaintiff sought specific to a project, namely, rescinding HMFA financing, could not be accomplished without significant and substantial impairment of the project and the rights of third parties).

Appellants' remaining arguments are without sufficient merit to warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.