On certification to the Superior Court, Appellate Division, whose opinion is reported at 212 N.J. Super. 69 (1986).
For reversal and remandment -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Concurring -- Justice Handler. The opinion of the Court was delivered by Pollock, J. Handler, J., concurring.
[109 NJ Page 603] The dispositive issue in this case, which is before us for the second time, is whether the Township of Long Beach enacted the challenged zoning ordinance for a valid purpose. Originally, the Law Division held in 1983 that the ordinance (81-1C) was "undeniably unreasonable and arbitrary and hence void as unconstitutional." In an unreported opinion in 1984, the Appellate Division reversed and remanded because the enactment of a later ordinance (83-9C), which was passed to correct procedural
defects pertaining to the enactment of ordinance 81-1C, rendered moot the challenge to that ordinance. Because the later ordinance was identical to the original ordinance, we reversed and remanded the matter to the Appellate Division for reconsideration. 101 N.J. 515 (1986). On remand, the Appellate Division found, among other things, that ordinance 83-9C had a valid zoning purpose and again reversed the judgment of the Law Division. 212 N.J. Super. 69 (1986). We granted certification, 107 N.J. 81 (1987), and now find that ordinance 83-9C, like ordinance 81-1C, does not have such a purpose. We find further that the sole purpose of the two ordinances was to reduce the value of the Riggs property so that the municipality could acquire it below fair market value. Accordingly, we reverse the judgment of the Appellate Division and remand the matter to the Law Division for the entry of an order declaring invalid ordinance 83-9C.
The relevant facts are that in 1976 the voters of Long Beach Township approved a referendum for the acquisition of "public open-space" property. At that time, appellants, Charles J. Riggs; Virginia Riggs, his wife; and their corporation, Island Homes, Inc. (collectively Riggs), owned the property in question, which is located between Long Beach Boulevard and Little Egg Harbor. Then, as now, the property, known generally as Block 0-19, Lot 1 on the township tax map, was unimproved. The property was zoned R-50, which allowed residential lots of five thousand square feet, with a minimum width of fifty feet. Consistent with these requirements, Riggs prepared an application in 1977 to subdivide the property into four lots.
In a letter dated December 14, 1977, the township attorney advised Riggs that the proposed subdivision would not be approved because the Township, in light of the 1976 referendum, intended to acquire the property. The letter informed Riggs that the property would be appraised within thirty days,
and if the Township could not acquire the property through contract, it would take the property through the exercise of eminent domain.
Contrary to the letter, the Township did not obtain an appraisal until September 1978, when the property was appraised for $234,500. The Township, however, neither offered to purchase the property nor commenced condemnation proceedings. Instead, that same year, the Planning Board adopted a master plan, and designated as public open space a five-block area consisting of eleven lots, including plaintiffs' property. Notwithstanding the adoption of the master plan, the Township amended the zoning ordinance in 1979 and retained R-50 zoning for the eleven-lot tract and the surrounding area. Thus, two years after the Township refused to process plaintiffs' subdivision application, the Township confirmed its commitment to R-50 zoning, under which Riggs could divide the property into four lots. Furthermore, 80% of the properties west of Long Beach Boulevard were developed on lots of 5,000 square feet or less, and thirty-two of the ninety other lots in the area, i.e., 36% of those lots, had areas less than 5,000 square feet. In short, the R-50 zoning for the Riggs property was consistent with the character of the neighborhood.
In 1979 and 1980, the parties engaged in negotiations in which the Township, consistent with its 1978 appraisal, offered to purchase the property for $234,500. At Riggs' request, the same appraiser valued the property in 1980 at $400,000. Both appraisals reflected the highest and best use of the property, which would be subdivision into four lots of approximately 9,200 square feet each.
Mayor Mancini was anxious to acquire the Riggs property, and the parties considered a sale for $400,000, subject to an immediate donation of $160,000 by Riggs to the Township. Toward that end, the Mayor wrote to Riggs on November 5, 1980, "[b]ecause of the dramatic rise of the value of land on Long Beach Island, and the substantial delay in obtaining
funding, it would be impossible for [the Township] to obtain the property at its present fair market value of $400,000 without you giving us the difference between the present value and the purchase price." The letter corroborates the desire of the Mayor to acquire the property, through one means or another, at the lowest possible price.
Because the parties could not agree, negotiations ended, and in December 1980, the Township instituted an unsuccessful action seeking specific performance of an alleged agreement of sale with Riggs. The Chancery Division dismissed the action and on April 2, 1985, the Appellate Division affirmed that dismissal.
Shortly after the parties ceased negotiations, in December 1980, the Township Committee approved on first reading an amendment to rezone the eleven-lot tract to R-10, which would permit lots with a minimum lot size of 10,000 square feet and a minimum width and depth of 75 feet. The effect would be to reduce the number of building lots on the Riggs property from four to two. In compliance with N.J.S.A. 40:55D-63, the commissioners referred the ordinance to the Planning Board for review. Because the Board had already held its regular meeting during the first week of December, Mayor Mancini called a special meeting, which was held in his office on December 23, 1980. At that meeting, the Board, which included Mayor Mancini as an ex officio member, approved ordinance 81-1C. Ten days later, on January 2, 1981, by a vote of 2-to-0, the Township Committee adopted ordinance 81-1C. With one commissioner absent, Mayor Mancini and another commissioner voted to approve the ordinance.
The minutes of the Planning Board recite that the "[p]urpose of ordinance was to retain one of the last remaining open spaces on Long Beach Boulevard. Commissioners were requesting approval and recommendations of planning board to rezone the area prior to the purchase with Green Acre funds."
Thus, those minutes support the inference that the rezoning was related to the acquisition of the Riggs property.
According to Mayor Mancini, who testified for the Township at trial, when the R-10 amendment was first proposed, the Riggs lot was the only affected property that was not yet owned or under contract of sale to the Township. Before the Appellate Division, the Township contended that it had not acquired title to all other lots, but apparently did not challenge the fact that it had executed contracts for the lots it had not acquired. 212 N.J. Super. at 72 n. 1.
One month after the adoption of the ordinance, on February 5, 1981, Riggs instituted this action, claiming, among other things, that the sole purpose of the 1981 amendment was to drive down the fair market value of his property so that the Township could acquire it more cheaply. At trial, Mayor Mancini testified about the adoption of the 1981 amendment. He explained that the Township sought to acquire the eleven-lot area for public use pursuant to the 1976 referendum and the 1978 master plan. The other ten property owners had sold or agreed to sell their properties to the Township. When negotiations with plaintiffs broke down, the Mayor realized that the 1979 ordinance retaining R-50 zoning was a mistake. In response to a question from the trial court whether the change in zoning had been precipitated by the problem in acquiring the Riggs property, the Mayor candidly admitted that "[t]here is no question that it provoked thought, discussion, and etc." and that "there's no question that the Riggs situation helped to bring out * * * the thought that we had neglected to zone this [area] properly in 1979." He acknowledged further that neither the physical conditions of the eleven lots nor the general conditions of the Township had changed since the adoption of the 1979 ordinance and the 1981 amendment, but simply claimed that the eleven-lot area should have been zoned low density in 1979. He explained that the Township generally zoned areas designated as public open space at the lowest density because that is "closest to that open space" and "if the [109 NJ Page 608] people voted to keep this open space, then it's * * * my responsibility to keep it open space." When asking the Mayor why the Township needed to rezone the Riggs property since it planned on condemning it, the trial court commented: "If you are going to condemn it, then condemn it. What's the difference whether it's in the R-50 or R-10, unless it is to get it at a cheaper price?" The Mayor responded that the 1979 amendment was a mistake, which the 1981 amendment was passed to correct.*fn1
In further defense of the amendment, the township planner, Thomas W. Birdsall, asserted that if the Township intended to acquire the property, it had an interest in restricting development to the lowest possible density on the theory that the rezoning would reduce acquisition costs. He further defended the ordinance by saying that the lower density zoning would result in the removal of fewer structures after acquisition by the municipality. His testimony was contradicted by John Maczuga, a planner retained by Riggs, who asserted that the possible future use of the property as public open space was irrelevant to the zoning of the property because the Township would have to acquire the property before it could create the public use.
The trial court concluded:
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 ...