Matthews, Seidman and Horn. The opinion of the court was delivered by Seidman, J.A.D.
The principal issue raised on this appeal is whether the Housing Co-operation Law, N.J.S.A. 55:14B-1 et seq. authorized the governing body of the City of Passaic to adopt a resolution rezoning and excepting from certain requirements of the local zoning ordinance a tract of land on which a limited-dividend housing corporation (N.J.S.A. 55:16-1 et seq.) proposed to construct a senior citizens housing project with financial assistance from the New Jersey Housing Finance Agency and upon its completion to contract with the housing authority of the municipality for the management of the project. Also involved is the validity of a companion resolution, the details of which appear below.
In a prerogative writ suit brought by a homeowners' association and individual property owners, the trial judge here set aside the resolution, and defendants, the owner
and developer of the proposed project, appealed.*fn* For reasons which follow, we affirm the judgment insofar as it relates to the first resolution, and reverse and remand as to the second.
Garden State High Rise Corporation (Garden State) owns a tract of land situated at 236-248 Aycrigg Avenue in Passaic. It obtained a building permit in July 1973 for the construction of a high-rise "luxury" apartment building thereon. Plaintiffs in this case attacked the issuance of the permit in an earlier prerogative writ action. Judgment was entered in that matter in favor of the corporation and was affirmed on appeal. Garden State alleges that because of the resultant delay and changes in economic conditions, financing commitments were no longer available and it could not proceed with construction.
Accordingly, Garden State's attorney wrote a letter to the Passaic City Council in September 1975 advising of its desire to obtain approval for a senior citizens housing structure under the regulations of the New Jersey Housing Finance Agency and the Federal Department of Housing and Urban Development (HUD). Construction of the project was to be financed by the Housing Finance Agency, with housing assistance payments to be made by HUD for units under lease to eligible senior citizens. The city council was entreated to take prompt action in the form of "resolutions of need and acceptance as well as [tax] abatement," and also to adopt necessary resolutions amending the zoning ordinance and granting exceptions thereto with respect to parking spaces per unit, density and floor area ratio. Emphasis was placed on the fact that prospective tenants would come under the strict
control of the Housing Finance Agency and the Limited-Dividend Housing Law, and that "the owners would be limited to an annual return of only 8% on their actual investment in the project." The city council was further informed that the Passaic Housing Authority had agreed to manage the project and to screen and approve all tenants "in accordance with and subject to HUD approval and HUD regulations."
A public hearing on the proposal was held before the city council on October 2, 1975. At its conclusion two resolutions were adopted. The first, No. 1393-75, noted in its preamble the urgent need for such project in Passaic. It recited that the proposed senior citizens housing project would be a
The resolution next stated that the city council was acting under N.J.S.A. 55:14B-4 and 7 for the purpose "of aiding and cooperating in the planning, undertaking and construction or operation of housing or redevelopment projects * * * to plan or replan, zone or rezone or make exceptions from building regulations and ordinances and change its map * * *." It then made certain amendments of, changes in and exceptions from the local zoning ordinance to accommodate the project. The previously issued building permits were also amended to conform to the new project. For our purposes, further elaboration is unnecessary.
The preamble to the second resolution, No. 1394-75, stated in pertinent part that Bernard Blasenheim Associates proposed to construct the project (Mr. Blasenheim was the president of Garden State), that they intended to apply to the public housing and development authority in the "Department of Community Affairs" for the approval of a certificate
of incorporation for a limited-dividend housing corporation, and that it was necessary for the governing body to certify its approval of the project. The city council found that the project would assist in the clearance, replanning, development or redevelopment of blighted areas in the municipality. The resolution expressed approval of the project and declared the city's intent to exempt the property from taxation, in lieu of which the housing corporation would pay to the city "an annual service charge for municipal services supplied to the housing development * * * not exceeding the tax on the property * * * for the year in which a mortgage on the development is executed * * * or, an amount not exceeding six and twenty-eight hundredths per cent (6.28%) of the annual gross revenues of the development * * * whichever amount is greater."
Plaintiffs' two-count complaint in lieu of prerogative writs assailed the resolutions as having been "on information and belief," drawn and submitted by the corporation's attorney and adopted following the exertion of great pressure and "in reliance on numerous misrepresentations both oral and in writing." It alleged that the resolutions purported to amend the zoning ordinance "in a manner which procedurally violated the Statutes of the State of New Jersey," and to grant variances in a manner contrary to law. The second count, which charged a conspiracy among the corporate and municipal defendants, is not involved on this appeal, as it was dismissed on defendants' motion for summary judgment and plaintiffs have not cross-appealed therefrom.
On cross-motions for summary judgment, apart from the one relating to the second count, plaintiffs' motion was granted. The trial judge's rationale was that under N.J.S.A. 55:14B-1 et seq. the applicant for the zoning changes and exceptions had to be the Passaic Housing Authority and not Garden State or Bernard Blasenheim Associates; that the project in question was not a work or undertaking by a housing authority ...