Cedar Cove, Inc. v. Stanzione

• Decision Date: 29 January 1991
• Citation: 122 N.J. 202,584 A.2d 784
• Parties: CEDAR COVE, INC., a corporation of the State of New Jersey, Plaintiff-Appellant, and The State of New Jersey, Department of Environmental Protection, Plaintiff-Intervenor-Respondent, v. Alphonse STANZIONE and Borough of South Toms River, a municipal corporation of the State of New Jersey, Defendants-Respondents, and Planning Board of the Borough of South Toms River, Defendants.
• Court: New Jersey Supreme Court

Page 202

122 N.J. 202

584 A.2d 784

CEDAR COVE, INC., a corporation of the State of New Jersey Plaintiff-Appellant and The State of New Jersey, Department of Environmental Protection, Plaintiff-Intervenor-Respondent, v. Alphonse STANZIONE and Borough of South Toms River, a municipal corporation of the State of New Jersey Defendants-Respondents and Planning Board of the Borough of South Toms River, Defendants.

Supreme Court of New Jersey.

Argued Sept. 11, 1990.

Decided Jan. 29, 1991.

Theodore E. Kyles, Jr., Paterson, for plaintiff-appellant.

Mary C. Jacobson, Deputy Atty. Gen., for plaintiff-intervenor-respondent (Robert J. Del Tufo, Atty. Gen., attorney).

Craig L. Wellerson, for defendant-respondent Borough of South Toms River, etc. (Dasti & Murphy, Forked River, attorneys).

Bruce Dickstein for defendant-respondent Alphonse Stanzione (Kimmelman, Wolff & Samson, Roseland, attorneys).

The opinion of the Court was delivered by

HANDLER, J.

The Green Acres Land Acquisition and Recreation Opportunities Act of 1975 ("1975 Act" or "1975 Green Acres Act") was the third in a sequence of statutes designed to provide State funding to assist municipalities with the acquisition and development of property for conservation and recreation. The two predecessors of the 1975 Act, the Green Acres Land Acquisition Acts of 1961 and 1971, each restricted the alienability of those properties that municipalities acquired with the assistance of State funds by requiring approvals at the State level before any future sale. The 1975 Act imposed an additional restriction on the alienability of conservation or recreational properties. It required State-level approval of the sale not only of properties acquired with State funds but of all conservation or recreational properties that were owned by the municipality at the time it received any Green Acres grant, even if such properties had not been acquired or developed with Green Acres funds. In this case, the Court must determine what municipal properties, not acquired or developed with Green Acres funds, should be deemed held for conservation and recreational uses within the meaning of this restriction of the 1975 Green Acres Act.

The issue arises in the following setting. In late 1984, the borough council of South Toms River determined to offer for sale a parcel of land abutting the Toms River and known as Mathis Plaza. The council passed a resolution to conduct a public auction of the property. Notices of the auction and specifications of bids, including a bid minimum of $330,000, were published in area newspapers in early December 1984. At the auction, respondent Alphonse Stanzione was the only bidder; he submitted an offer of $330,000, which was accepted by the borough.

Subsequently, plaintiff, Cedar Cove, Inc., a corporation doing business in South Toms River and the owner of property adjacent to Mathis Plaza, filed an action challenging the validity of the borough's agreement to sell the property, naming as defendants the borough, its planning board, and Stanzione. The Department of Environmental Protection ("DEP") was permitted to intervene as a party plaintiff. Cedar Cove, which had submitted an untimely bid after Stanzione's bid had already been accepted, principally alleged that the auction had been procedurally defective, that it had violated the State statute governing municipal land sales ( N.J.S.A. 40A:12-13), and that the sale process had been tainted by conflicts of interest. It also alleged that Mathis Plaza was used for recreational purposes and that the borough had not complied with the statutory restriction of the 1975 Green Acres Act requiring State approvals prior to sale of properties "held by" a municipality for recreational or conservation purposes.

Ultimately, the Law Division found in favor of defendants on all grounds except one: it determined that Mathis Plaza was subject to the restriction of the 1975 Green Acres Act. On appeal, the Appellate Division reversed that determination. 233 N.J.Super. 336, 558 A.2d 1351 (1989). We granted certification, 117 N.J. 647, 569 A.2d 1344 (1989), limited to the issue of the proper construction of N.J.S.A. 13:8A-47b as applied to the sale of public lands in this case.

I.

The central issue is whether South Toms River was prohibited from selling Mathis Plaza to respondent Stanzione without State-level approvals because Mathis Plaza was, in the terms of the 1975 Green Acres Act, N.J.S.A. 13:8A-47b, "held by [South Toms River] for [recreational and conservation] purposes at the time of receipt of [a 1978] grant." This issue arises because the borough, in 1977, applied for $27,500 in Green Acres funds to develop a ballfield on land it already owned. The grant was received in 1978. At the time it applied for and received this Green Acres grant, the municipality owned the Mathis Plaza property. The borough, as noted, undertook to sell Mathis Plaza in 1984 without obtaining State approval.

The record discloses that Mathis Plaza was created from fill dredged from a channel in the Toms River by the Army Corps of Engineers in 1927. As early as 1928, the borough authorized improvements to the property, apparently to facilitate its use as a public park. However, the borough did not acquire title to Mathis Plaza until 1935, when it purchased the property from the State for $10,000. The State deed contained no restrictions on the property's use. Mathis Plaza now comprises Lots 1, 2, 3, and 4 of Block 3, Borough of South Toms River. Lots 2 and 4 have long been leased for commercial purposes and are currently occupied by a gas station and retail glass store. These lots are concededly not held for recreational or conservation purposes and thus are not subject to the restrictions of N.J.S.A. 13:8A-47b.

The matter is considerably less clear with respect to the remaining portions of the property, Lots 1 and 3, the sale of which would be subject to State approvals only if they were held by the borough for recreational and conservation purposes at the time of the 1978 Green Acres grant. The record reflects numerous instances of the use of those lots as a public park and recreational facility, undertaken with the approval and support of the borough over a forty-year period, from the purchase of Mathis Plaza in 1935 through the time of the Green Acres grant in 1978. Area residents used the piers at Mathis Plaza for fishing, and the borough rented docking facilities for boats. For a time, there was a war memorial on Lot 3, and the area was used for Memorial Day services, as well as for circuses or carnivals in connection with fund-raising activities for borough services. The borough provided street lights and sanitation services to the site. The borough also installed benches, tables, and grills for picnicking at the site, although it appears that some of those facilities were not provided until after the borough's 1978 acceptance of Green Acres funds.

In addition to the facts indicative of the authorized and actual recreational use of the property, there was significant evidence that the borough was also interested in the commercial development of Mathis Plaza and its potential as a source of revenue. As mentioned, from the borough's purchase of Mathis Plaza or shortly thereafter, Lots 2 and 4 were used for commercial purposes. The borough council from time to time in the 1960s and 1970s attempted to lease the remaining property for commercial development. Further, various borough planning and zoning documents indicated possible intent for commercial use. Thus, a 1972 zoning ordinance and 1977 zoning map placed Mathis Plaza in a "Special Economic Development" zone, where commercial or residential uses would be permitted.

Moreover, there is no indication of any formal dedication of Mathis Plaza to park or recreational use. The 1971 Master Plan and the 1972 borough map designated certain tracts as parklands, but Mathis Plaza was not among them. As part of its 1977 Green Acres application, the borough was required to complete a DEP form entitled "Recreation and Open Space Inventory", listing two types of properties, "Developed Park and Recreation Areas" and "Undeveloped Lands ... Designated for Open Space, Recreation or Conservation Purposes." The borough did not list any of the Mathis Plaza property on either of the inventories it submitted to the DEP in 1977. According to the DEP, such inventories have regularly been required as part of a grant application, and have been used to determine what properties would be subject to the sale restrictions set forth in DEP regulations and individual local grant contracts. The inventories, along with the final grant agreements, generally have also been filed with the clerk's office for the county in which the relevant properties are located, as constructive notice of the restrictions on their future sale.

The Law Division determined on this record that prior to the receipt of Green Acres funds for development of a ballfield at a separate site in 1978, the borough owned and held Mathis Plaza and permitted and assisted in its recreational use by borough residents. The court also acknowledged that the borough at the same time held Mathis Plaza with an intention of realizing its future economic value through its commercial use. Nevertheless, the court concluded that, regardless of any other intended purpose, the borough held the property for recreational use at the time of its acceptance of Green Acres funds and that this authorized and actual recreational use sufficed to invoke the restrictions of N.J.S.A. 13:8A-47b with respect to the sale of the property. The Appellate Division did not disturb the trial court's finding that the property was actually used for recreational purposes with official authorization or permission of the municipality. However, the appellate court concluded that under the circumstances, that use was insufficient to trigger the restriction of subsection 47b. It...