On appeal from the Superior Court of New Jersey, Law Division, Ocean County.
Michels and Petrella. The opinion of the Court was delivered by Michels, P.J.A.D.
Defendant Township of Long Beach (Township) appealed from a judgment of the Law Division entered in favor of plaintiffs Charles J. Riggs and Virginia Riggs declaring Township Ordinance No. 81-1C invalid and of no effect. The trial court held that the ordinance was "undebatably unreasonable and arbitrary and hence void as unconstitutional." We reversed the judgment of the trial court because we held to the view that the more recently enacted Township ordinance, Ordinance No. 83-9C, rendered the issue as to the initial ordinance moot. We also held that plaintiffs' claim was barred because they had failed to exhaust their administrative remedies in not seeking a variance from the terms of the ordinance. Accordingly, we remanded the matter to the trial court with directions that it remand the matter to the local level for consideration of plaintiffs' application for a variance to subdivide their property. The Supreme Court, finding that "Ordinance No. 83-9C did not change the substance of the prior Ordinance No. 81-1C in any way whatsoever," reversed the judgment of this court and remanded the matter to us for reconsideration. Riggs v. Long Beach Tp., 101 N.J. 515 (1986).
Although the background of this matter is set forth in the Supreme Court's opinion, a brief recitation of some of the pertinent facts is necessary to an understanding of our decision. In 1979 the Planning Board of defendant Township adopted a Master Plan and Land Use Plan Element. Pursuant to the Master Plan and Land Use Plan Element, the Township adopted a zoning ordinance in 1979. A subsequent amendment to that ordinance, No. 81-1C, adopted on January 2, 1982, rezoned a portion of land in the Brant Beach section of the Township that included property owned by plaintiffs. Because of procedural defects in Ordinance No. 81-1C, a new ordinance, No. 83-9C, was passed to correct 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." Riggs v. Long Beach Tp., supra, 101 N.J. at 520.
The Brant Beach area described in both ordinances consisted of 11 lots fronting on the bay. The lots were all undeveloped, with the exception of a Township recreation area. In 1976 the Township held a referendum. The public voted in favor of acquiring this area with Green Acres funds for public use. The Township undertook to acquire these lots for use as a park and recreation facility and, at the time of the adoption of Ordinance No. 81-1C, the Township had either purchased the other 10 lots or had executed a contract for their purchase.*fn1
Prior to 1978 this described property was zoned R-50, a designation corresponding to a "General Residential Zone." The 1978 Master Plan and Land Use Plan Element designated this property as "Public Open Space," but the 1979 zoning ordinance again zoned the described tract R-50, the highest density residential zone. In 1982 the amendatory ordinance, No. 81-1C (now Ordinance No. 83-9C) rezoned plaintiffs' property from R-50 to R-10. Ordinance No. 83-9C was subsequently enacted to correct the procedural defects in Ordinance No. 81-1C and thus replaced the latter ordinance.
The impact of the ordinance was to reduce the permissible subdivision of plaintiffs' property from four building lots to two, in accordance with the R-10 designation. In an area zoned
R-10 the permissible uses include single family detached dwellings, churches, schools, museums and libraries, public utilities structures (but not including storage and maintenance uses and garages), professional offices and municipal recreational facilities and grounds. An R-50 designation permits all uses permitted in R-10 districts and, in addition, two family dwellings, buildings used exclusively for public purposes by a governmental body and storage and maintenance facilities. In R-10 districts no building can be erected on a lot less than 10,000 square feet in area. With the exception of ocean front property, the zoning ordinance requires lots in an R-10 district to have a minimum width and minimum depth of 75 feet. In R-50 districts, residential lots are required to have a minimum lot area of only 5,000 square feet and a minimum width of 50 feet.*fn2
Prior to the amendatory ordinance, plaintiffs had sought to subdivide the property into four lots and to construct a house on one of them. In late 1977, plaintiffs had applied to the Township building inspector for a permit to construct the house and had had an engineer prepare a plot plan to subdivide the property. Plaintiffs were unable to obtain the necessary approval and in December of 1977 received a letter from the
Township's attorney apprising them that the Township intended to acquire their property. The letter stated that the Township would have an appraisal made within 30 days for the purpose of negotiating the purchase of the property, but informed plaintiffs that if the Township could not acquire the property through "amicable negotiations" it would be taken by eminent domain. The letter further stated that "[i]n the interim period, no further subdivision nor building will be permitted on your lands."
The property was appraised in September, 1978 at $234,500. However, the Township made no offer to purchase the property at that time, nor did it begin condemnation proceedings. The Township subsequently offered plaintiffs $234,500 to purchase the property. Negotiations followed, and plaintiffs had the property reappraised in 1980 by the same appraisers who had performed the earlier 1978 appraisal. These appraisals set the market value of the property as of September, 1980 at $400,000. The appraisals were made of the highest and best use of the property, determined by each appraiser to be a subdivision of the property into four residential bayfront properties of approximately 9,200 square feet.*fn3 Although the Township's attorney prepared contracts for the sale of the property, plaintiffs refused to execute an agreement to sell the property. On cross-examination plaintiff Charles J. Riggs indicated that during the course of the negotiations, at the time the second appraisals were secured, he and the Township discussed a purchase price of approximately $234,000 cash, together with a $160,000 donation by plaintiffs to the Township in exchange for tax benefits. Finally, in November 1980 plaintiffs, through their attorney, advised the Township that under no circumstances would they sell the property to the Township.
In December, 1980, shortly after plaintiffs had informed the Township that they would not sell the property, the Township
instituted an action in the Chancery Division seeking specific performance of an alleged agreement for the sale of the property. The Township also sought at this time, by adopting Ordinance No. 81-1C, to rezone as described previously the tract of land which included plaintiffs' lot.
Subsequently, plaintiffs instituted this action claiming that in adopting this ordinance the Township acted contrary to the purposes and intent of the Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq. Specifically, plaintiffs alleged that the Township had failed to satisfy the procedural requirements of the Municipal Land Use Law; that the ordinance was passed "in a deliberate effort to reduce the value of plaintiff's land in order to reduce the cost of condemnation of said land" and that the Township had "engaged in a deliberate course of harassment . . . in an effort to force the plaintiffs to sell . . . for a price value less than fair market value." Plaintiffs charged that Ordinance No. 81-1C constituted spot zoning and was arbitrary and capricious and an abuse of power by the Township. The procedural defects in this ordinance were corrected by the enactment of Ordinance No. 83-9C, the substance of which is identical to Ordinance No. 81-1C.
The trial court declared the ordinance invalid and unconstitutional, reasoning, in part, as follows:
I find that the plaintiff's parcel was subdividable into four 50 foot building lots before the ordinance in question and would only be subdividable into two 100 foot building lots under the terms of the ordinance in question. This adversely effected [sic] the value of the property. The plaintiff's parcel is located in a residential area known as Brant Beach which is almost entirely zoned for 50 foot building lots. Under the new ordinance the plaintiff's 200 foot lot would be the only property in Brant Beach requiring 100 foot lots.
It has been held that use restrictions upon real property must find their justification in some aspect of a police power, reasonably exerted for the public welfare. I can find no relationship to the public welfare in changing the use of a single parcel of property from ...