On certification to the Superior Court, Appellate Division.
For Reversal and Remandment -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. For Affirmance -- None. The opinion of the Court was delivered by Handler, J.
In this case the trial court determined that a zoning ordinance passed by defendant, Township of Long Beach, was arbitrary and capricious because the ordinance affected only the plaintiffs' property. The trial court also ruled that the ordinance was unconstitutional because it had no relation to the public welfare. On appeal, the Appellate Division reversed the trial court judgment. It held that because the Township had passed a more recent, though virtually identical, ordinance the issue as to the validity of the initial ordinance had become moot. It then concluded that under the "time-of-decision rule," the claims of the parties should be determined by the trial court under the new ordinance. The Appellate Division also ruled that because the plaintiffs had not applied for a variance from the earlier ordinance, their contention that the ordinance was invalid and unconstitutional was barred under the exhaustion-of-remedies doctrine. We granted plaintiffs' petition for certification, 101 N.J. 515 (1985). We reverse the judgment of the Appellate Division and remand the matter for its reconsideration.
The plaintiffs, Charles and Virginia Riggs, own harborfront property in the Township of Long Beach. In 1976 the Township held a referendum, which was approved by the public, authorizing the Township to acquire and establish a "public open-space" area. Plaintiffs' property is one of eleven lots that are included in the Township Master Plan Element designated
as "public open-space" as defined by N.J.S.A. 40:55D-6. By statute, this zoning purpose requires that the area first be "conveyed or otherwise dedicated to a municipality." Ibid. The trial court found that the Township had successfully arranged for the purchase of all the lots except plaintiffs'.
Prior to January 2, 1981, plaintiffs' property had been zoned "R-50," which allowed high-density residential habitation with minimum lot sizes of 5,000 square feet and minimum width of 50 feet. This would have allowed plaintiffs to divide their lot into four separate plots. Plaintiffs had applied to the Township for a permit to subdivide their property into these four lots, but were denied in a letter dated December 14, 1977. That letter also informed plaintiffs that the Township intended to purchase their property either by "amicable negotiation" or by the power of eminent domain. The letter additionally advised plaintiffs that in "the interim period" "no further subdivision nor building will be permitted on your lands." Thereafter, negotiations between the plaintiffs and the Township for purchase of the property broke down.*fn1
Two appraisals were made as to the value of the property. In 1978 the property was appraised at $234,500, and in 1980 it was appraised at $400,000. These appraisals were made on the assumption that plaintiffs could make the most profitable use of their property -- four residential bayfront properties of approximately 9,200 feet. Thereafter, in 1980, the Township enacted Ordinance No. 81-1C. This authorized for the zone in which plaintiffs' property was located only low-density R-10 use, with minimum lot sizes of 10,000 square feet and minimum width and depth of 75 feet.
Plaintiffs brought suit claiming that Ordinance No. 81-1C was invalid. They alleged that the ordinance was aimed at driving down the market value of their property, was "spot-zoning," and was arbitrary and capricious. Their complaint further alleged procedural irregularities attending the passage of the ordinance. The matter proceeded to trial, and on the first day of trial the Township notified the court that a new ordinance, No. 83-9C, had been passed, which corrected the procedural defects of the prior ordinance. The two ordinances, in fact, are verbatim duplicates of one another, differing only in designation and in citation form to the revised General Ordinances.
The Township contended that the passage of Ordinance No. 83-9C mooted the challenge to Ordinance No. 81-1C. This contention was rejected by the trial court, which also determined that the procedural irregularities attending the passage of Ordinance No. 81-1C were cured by the passage of Ordinance No. 83-9C. The trial court then examined the merits of plaintiffs' claims. It found that although the ordinance purported to apply to a five-block area, the Township had, by deed or contract, acquired all the lots covered by the ordinance except for the lot owned by plaintiffs; the court determined that plaintiffs' property would be the only property in the Township affected by the ordinance. Accordingly, the trial court held that the ordinance was not related to the public welfare, was unreasonable, and, therefore, unconstitutional. As noted, the Appellate Division reversed on the grounds that Ordinance No. 83-9C mooted the ...