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Alling Street Urban Renewal Co. v. City of Newark

Decided: September 11, 1985.


On appeal from Superior Court of New Jersey, Law Division, Essex County.

Fritz, Gaulkin and Long. The opinion of the court was delivered by Fritz, P.J.A.D.


This appeal centers about a dispute between an urban renewal contractor, plaintiff Alling Street Urban Renewal Company (Alling), and the City of Newark and requires our interpretation of the credit provision of N.J.S.A. 40:55C-65. The trial judge found "no great difficulty" with the construction of the statute urged by Newark and entered judgment accordingly. While we think the matter is not without some difficulty, we reach a different conclusion from that of the trial judge and so reverse.

Plaintiff is a limited partnership qualified to do business under the Urban Renewal Corporation and Association Law of 1961, N.J.S.A. 40:55C-40 et seq. (the Act). As such it entered into an agreement, to be "governed by the provisions of [the Act]," with the City of Newark, approving an urban renewal project in Newark and committing the city to an exemption from taxation of the improvements "in accordance with the provisions of [the Act]." For this Alling was obligated for payment of "an Annual Service Charge for municipal service supplied to said project of a sum equal to 2% of the total project cost." Acknowledging the application of N.J.S.A. 40:55C-65, the agreement provided for installment payments. The contract did not provide for any credit, but clearly the agreement was entered into in conformity with the statute. The question here is not the fact of the entitlement of plaintiff to credit, but rather the meaning of the credit provision in the statute.

The "Annual Service Charge" provided for in the agreement conforms to the statutory scheme. In the statute a credit clause follows the extensive and complicated formulation of the annual service charge:

Against such annual charge the corporation or association . . . shall be entitled to credit for the amount, without interest, of the real estate taxes on land paid by it in the last four preceding quarterly installments.

The issue is simple to state: Alling equates "such annual charge" in the above phrase with the annual service charge to which reference is made in the several preceding paragraphs of

this section. It insists that the land taxes paid should be credited against that charge, subject only to the provision, also appearing in the section, that "in no event shall such [annual service charge] payment together with the taxes on the land, in any year after first occupancy of the project be less than the total taxes assessed on all real property in the area covered by the project in the calendar year immediately preceding the acquisition of the said area by the municipality or its agency, or by the private or public owner from whom the urban renewal corporation acquired the land." See N.J.S.A. 40:55C-65. Newark, on the other hand, argues that had the Legislature meant "annual service charge" in the credit provision, it would have said that rather than "annual charge," the phrase thus demonstrating that the credit was to be applied against all annual charges including the land taxes.

The trial judge was persuaded by the difference in language, as urged by Newark, holding that "[t]he annual service charge is one thing and the annual charge is the land taxes plus the annual service charge." It is in this that our judgment differs from his.

Hornbook law and consistent authority require that in the search for legislative intent, which is our single purpose, Clifton v. Zweir, 36 N.J. 309, 322 (1962), if the words used have a plain meaning, construction is not only unnecessary but improper. Duke Power Co. v. Patten, 20 N.J. 42, 49 (1955). Such an effort "in a case where not required is to do violence to the doctrine of the separation of powers." Watt v. Mayor and Council of Borough of Franklin, 21 N.J. 274, 277 (1956). Although our reaction to the words is different from that of the trial judge (which would seem to contraindicate a plain meaning to the words), we remain persuaded that reference to "such" annual charge, in a section which refers collaterally to real estate taxes but is forcefully and directly concerned with the annual service charge, can mean only that charge, i.e., the annual service charge. Reinforcement for this view is found in

the fact that the paragraph immediately preceding that in which "such annual charge" appears speaks in its only sentence of the "aforesaid payment," a clear, indisputable reference to the annual service charge. We believe that the distinction between "annual service charge" and "annual charge" considered in the context of the whole body of law and the juxtaposition of these phrases with the others in this one section of the statute is too thin a reed to thwart the ...

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