On certification to the Superior Court, Appellate Division, whose opinion is reported at 228 N.J. Super. 33 (1988).
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.
[119 NJ Page 62] This case requires the Court to consider the effect of an agreement reached in 1962 between two contiguous municipalities. The agreement, authorized by joint resolutions, permits each municipality to exercise its power of taxation over certain
parcels of property that straddle the two municipalities. The agreement also authorizes each municipality to provide municipal services to those properties that it taxes. The issue posed is whether this agreement can be construed as including the power to zone.
Respondents, Lou Ferraro and Hazlet Auto Clean, Inc., own approximately 57,000 square feet of property that is divided by the line separating the Township of Holmdel from the Township of Hazlet: 39,700 square feet or 70% of the property lies in Hazlet, the remaining 30% lies in Holmdel. The Hazlet portion is within that Township's Business Highway Zone; the Holmdel portion is zoned for residential use only.
The property is currently vacant, and it is here that Ferraro desires to construct his car-wash business, Hazlet Auto Clean. The facility he proposes contains two components: an automated, full-service car wash, and an area with stalls for self-service car washing.
Because the Holmdel portion of the property is zoned residential, respondent Ferraro applied to the Zoning Board of Adjustment of the Township of Holmdel ("Board") for a use variance, pursuant to N.J.S.A. 40:55D-70(d). After four public hearings in 1987, the Board denied Ferraro's variance application. Ferraro appealed the Board's decision to the Law Division, contending that the variance denial was arbitrary and capricious. The trial court concluded that the Board lacked jurisdiction to rule on the variance because Holmdel had ceded its zoning authority to Hazlet under a 1962 joint resolution ("Resolution") between Holmdel and Hazlet.
The 1962 Resolution authorizes each municipality to exercise its power of taxation over particular properties located in both municipalities. The trial court determined that the Resolution embodied an agreement under which "Holmdel Township effectively relinquished all of their rights with respect to the thirty
percent of [Ferraro's] land [that lies within its boundaries] by allowing Hazlet to tax it." The court premised this delegation of authority, which, it determined, included the municipality's zoning power, on N.J.S.A. 40A:13-19, and -20. Those statutes provide that one municipality may grant the power of "sole supervision" over bordering land to another municipality.
On appeal, the Appellate Division noted, in a published opinion, 228 N.J. Super. 33, 548 A.2d 1139 (1988), that the statutory provisions relied on by the trial court were not enacted until 1979. It nevertheless reasoned that, in theory, the 1962 agreement could be interpreted in light of that statutory authority and thus could have transferred "sole authority" over the land to Hazlet, including the power to zone the Ferraro property. The Appellate Division remanded the case for a further factual determination of whether the parties intended by their 1962 agreement to divest Holmdel of its zoning jurisdiction over the property in question. We granted Holmdel's petition for certification. 114 N.J. 518, 555 A.2d 631 (1989).
In 1962, Holmdel and Hazlet (then called the Township of Raritan) adopted a joint resolution providing for the tax assessment of eleven lots that straddled the border between the two municipalities. The Resolution contained certain recitals:
WHEREAS, the boundary line between the taxing districts of the Township of Holmdel and the Township of Raritan divides certain lots or tracts of land, and WHEREAS, it is deemed necessary and desirable to determine for assessment purposes the lots or tracts of lands to be assessed by the respective townships, and
WHEREAS, it has been agreed between the assessors of the respective townships that certain of the lots divided by the line between taxing districts should be assessed by the Township of Raritan and certain of the lots should be assessed by the Township of Holmdel, and
WHEREAS, it is agreed between the respective townships that municipal services should be ...