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State v. Port Authority

Decided: June 7, 1977.

STATE OF NEW JERSEY, DEPARTMENT OF TRANSPORTATION AND NEW JERSEY TURNPIKE AUTHORITY, PLAINTIFFS,
v.
THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY, DEFENDANT



Osborne, J.s.c.

Osborne

[151 NJSuper Page 128] This case was originally presented to the court on a motion for summary judgment by plaintiffs,

New Jersey Department of Transportation (DOT) and New Jersey Turnpike Authority (Turnpike). The parties thereafter agreed at the hearing to have the matter resolved on cross-motions for summary judgment.

The complaint seeks a declaratory judgment that (1) the Port Authority has authority to commit funds to the Route 81 project under existing bi-state legislation; (2) additional bi-state legislative approval is not required to permit the Authority to pay a part of the cost of said project, and (3) existing statutory authority renders the design agreement for the project and the resolution of the Board of Commissioners of the Port Authority dated May 26, 1975, a valid and unconditional obligation by the Authority to assume 50% of the costs of said project upon formal ratification by the Authority of a written agreement to that effect.

The parties agree that the primary issue is whether the Authority is authorized under existing legislation to participate in the construction costs of the project. The history behind this lawsuit is relevant to a determination of this question.

On May 6, 1976 plaintiffs and defendant entered into an agreement for professional engineering services with respect to the design of the project. Pursuant to this agreement the parties were to share the total project cost*fn1 of $50 million as follows -- 50% by the Authority, 25% by the Turnpike, and 25% by DOT.

A brief description of the project is essential. The "Environmental Impact Assessment" prepared by DOT indicates that it will consist of the construction of Turnpike Interchange 13A, approximately 2 1/2 miles north of the existing Interchange 13, and the construction of a new highway interchange connecting the new Turnpike interchange with North Avenue and Routes 1 and 9 in Elizabeth.

The purpose of the project as set forth in the "Environmental Impact Assessment" is to:

"significantly improve the access to Newark Airport, Ports Elizabeth and Newark, and the extensive industrial/warehouse development in the northeastern portion of Elizabeth."

All parties agree that the project would indeed provide improved access to existing authority facilities as well as benefit the New Jersey Turnpike, the State Highway system and, in particular, the City of Elizabeth.

A close reading of the design agreement indicates that none of the parties contemplated that this would be the final expression of their joint venture. Paragraph 3 supports this conclusion in stating:

WHEREAS, the State of New Jersey, the Port Authority of New York and New Jersey and the New Jersey Turnpike Authority, upon being duly authorized, contemplate entering into a comprehensive Tri-Party Agreement providing for the construction of said Interchange 13A-Route 81, Project; * * *

Throughout the agreement there are also additional references to the parties' intent to enter into other contracts for ...


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