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Cedar Cove Inc. v. Stanzione

Decided: January 29, 1991.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 233 N.J. Super. 336 (1989).

For reversal and reinstatement -- Chief Justice Wilentz, and Justices Clifford, Handler, Pollock, O'Hern and Stein. For affirmance -- Justice Garibaldi. The opinion of the Court was delivered by Handler, J. Garibaldi, J., dissenting.


[122 NJ Page 205] The Green Acres Land Acquisition and Recreation Opportunities Act of 1975 ("1975 Act" or "1975 Green Acres Act") was the third in a sequence of statutes designed to provide State funding to assist municipalities with the acquisition and development of property for conservation and recreation. The two predecessors of the 1975 Act, the Green Acres Land Acquisition Acts of 1961 and 1971, each restricted the alienability of those properties that municipalities acquired with the assistance of State funds by requiring approvals at the State level before any future sale. The 1975 Act imposed an additional restriction on the alienability of conservation or recreational properties. It required State-level approval of the sale not only of properties acquired with State funds but of all conservation or recreational properties that were owned by the municipality at the time it received any Green Acres grant, even if such properties had not been acquired or developed with Green Acres funds. In this case, the Court must determine what municipal properties, not acquired or developed with Green Acres funds, should be deemed held for conservation and recreational uses within the meaning of this restriction of the 1975 Green Acres Act.

The issue arises in the following setting. In late 1984, the borough council of South Toms River determined to offer for sale a parcel of land abutting the Toms River and known as Mathis Plaza. The council passed a resolution to conduct a public auction of the property. Notices of the auction and specifications of bids, including a bid minimum of $330,000, were published in area newspapers in early December 1984. At the auction, respondent Alphonse Stanzione was the only bidder; he submitted an offer of $330,000, which was accepted by the borough.

Subsequently, plaintiff, Cedar Cove, Inc., a corporation doing business in South Toms River and the owner of property adjacent to Mathis Plaza, filed an action challenging the validity of the borough's agreement to sell the property, naming as defendants the borough, its planning board, and Stanzione. The Department of Environmental Protection ("DEP") was permitted to intervene as a party plaintiff. Cedar Cove, which had submitted an untimely bid after Stanzione's bid had already been accepted, principally alleged that the auction had been procedurally defective, that it had violated the State statute governing municipal land sales (N.J.S.A. 40A:12-13), and that the sale process had been tainted by conflicts of interest. It also alleged that Mathis Plaza was used for recreational purposes and that the borough had not complied with the statutory restriction of the 1975 Green Acres Act requiring State approvals prior to sale of properties "held by" a municipality for recreational or conservation purposes.

Ultimately, the Law Division found in favor of defendants on all grounds except one: it determined that Mathis Plaza was subject to the restriction of the 1975 Green Acres Act. On appeal, the Appellate Division reversed that determination. 233 N.J. Super. 336, 558 A.2d 1351 (1989). We granted certification, 117 N.J. 647, 569 A.2d 1344 (1989), limited to the issue of the proper construction of N.J.S.A. 13:8A-47b as applied to the sale of public lands in this case.


The central issue is whether South Toms River was prohibited from selling Mathis Plaza to respondent Stanzione without State-level approvals because Mathis Plaza was, in the terms of the 1975 Green Acres Act, N.J.S.A. 13:8A-47b, "held by [South Toms River] for [recreational and conservation] purposes at the time of receipt of [a 1978] grant." This issue arises because the borough, in 1977, applied for $27,500 in Green Acres funds to develop a ballfield on land it already owned. The grant was received in 1978. At the time it applied for and received this Green Acres grant, the municipality owned the Mathis Plaza property. The borough, as noted, undertook to sell Mathis Plaza in 1984 without obtaining State approval.

The record discloses that Mathis Plaza was created from fill dredged from a channel in the Toms River by the Army Corps of Engineers in 1927. As early as 1928, the borough authorized improvements to the property, apparently to facilitate its use as a public park. However, the borough did not acquire title to Mathis Plaza until 1935, when it purchased the property from the State for $10,000. The State deed contained no restrictions on the property's use. Mathis Plaza now comprises Lots 1, 2, 3, and 4 of Block 3, Borough of South Toms River. Lots 2 and 4 have long been leased for commercial purposes and are currently occupied by a gas station and retail glass store. These lots are concededly not held for recreational or conservation purposes and thus are not subject to the restrictions of N.J.S.A. 13:8A-47b.

The matter is considerably less clear with respect to the remaining portions of the property, Lots 1 and 3, the sale of which would be subject to State approvals only if they were held by the borough for recreational and conservation purposes at the time of the 1978 Green Acres grant. The record reflects numerous instances of the use of those lots as a public park and recreational facility, undertaken with the approval and support of the borough over a forty-year period, from the purchase of

Mathis Plaza in 1935 through the time of the Green Acres grant in 1978. Area residents used the piers at Mathis Plaza for fishing, and the borough rented docking facilities for boats. For a time, there was a war memorial on Lot 3, and the area was used for Memorial Day services, as well as for circuses or carnivals in connection with fund-raising activities for borough services. The borough provided street lights and sanitation services to the site. The borough also installed benches, tables, and grills for picnicking at the site, although it appears that some of those facilities were not provided until after the borough's 1978 acceptance of Green Acres funds.

In addition to the facts indicative of the authorized and actual recreational use of the property, there was significant evidence that the borough was also interested in the commercial development of Mathis Plaza and its potential as a source of revenue. As mentioned, from the borough's purchase of Mathis Plaza or shortly thereafter, Lots 2 and 4 were used for commercial purposes. The borough council from time to time in the 1960s and 1970s attempted to lease the remaining property for commercial development. Further, various borough planning and zoning documents indicated possible intent for commercial use. Thus, a 1972 zoning ordinance and 1977 zoning map placed Mathis Plaza in a "Special Economic Development" zone, where commercial or residential uses would be permitted.

Moreover, there is no indication of any formal dedication of Mathis Plaza to park or recreational use. The 1971 Master Plan and the 1972 borough map designated certain tracts as parklands, but Mathis Plaza was not among them. As part of its 1977 Green Acres application, the borough was required to complete a DEP form entitled "Recreation and Open Space Inventory", listing two types of properties, "Developed Park and Recreation Areas" and "Undeveloped Lands . . . Designated for Open Space, Recreation or Conservation Purposes." The borough did not list any of the Mathis Plaza property on either of the inventories it submitted to the DEP in 1977. According to the DEP, such inventories have regularly been required as

part of a grant application, and have been used to determine what properties would be subject to the sale restrictions set forth in DEP regulations and individual local grant contracts. The inventories, along with the final grant agreements, generally have also been filed with the clerk's office for the county in which the relevant properties are located, as constructive notice of the restrictions on their future sale.

The Law Division determined on this record that prior to the receipt of Green Acres funds for development of a ballfield at a separate site in 1978, the borough owned and held Mathis Plaza and permitted and assisted in its recreational use by borough residents. The court also acknowledged that the borough at the same time held Mathis Plaza with an intention of realizing its future economic value through its commercial use. Nevertheless, the court concluded that, regardless of any other intended purpose, the borough held the property for recreational use at the time of its acceptance of Green Acres funds and that this authorized and actual recreational use sufficed to invoke the restrictions of N.J.S.A. 13:8A-47b with respect to the sale of the property. The Appellate Division did not disturb the trial court's finding that the property was actually used for recreational purposes with official authorization or permission of the municipality. However, the appellate court concluded that under the circumstances, that use was insufficient to trigger the restriction of subsection 47b. It construed the statute as requiring a "municipal resolve permanently to devote" such lands to recreation or conservation, 233 N.J. Super. at 343, 558 A.2d 1351. Its review of the evidence under that narrow standard led to the conclusion that the borough did not hold Mathis Plaza with a resolve permanently to devote that property to recreational purposes.


The critical subsection of the 1975 Green Acres Act in its entirety reads:

A local unit which receives a grant under this act shall not dispose of or divert to a use for other than recreation and conservation purposes any lands held by such local unit for such purposes at the time of receipt of said grant without the approval of the commissioner [of the DEP] and the State House Commission and following a public hearing by the local unit at least 1 month prior to any such approvals. [ N.J.S.A. 13:8A-47b.]

The plain language of the statute lends itself to the interpretation that municipally-owned or -held properties that are actually used for recreational and conservation purposes fall within the ambit of the 1975 Green Acres restrictions on future sales. Subsection 47b defines the subject properties as "any lands held by such local unit for such purposes." There is no significant interpretative problem engendered by the phrase "held by." It denotes municipal ownership, possession, control, maintenance, and the like. See Wasser & Winters Company v. Jefferson County, 84 Wash. 2d 597, 599, 528 P. 2d 471, 472-73 (1974). Here, the borough obviously "held" Mathis Plaza. It is the interpretation of the statute's qualifying phrase "for such purposes" that is critical to whether the restriction on future sale may apply.

The "purposes" that are specified in the statutory restriction are "recreation and conservation purposes." N.J.S.A. 13:84-47b. These purposes are expressly defined in the 1975 Act:

Use of lands for parks, natural areas, historic areas, forests, camping, fishing, water reserves, wildlife, reservoirs, hunting, boating, winter sports and similar uses for either public outdoor recreation or conservation of natural resources, or both. [ N.J.S.A. 13:8A-37(f).]

This language also indicates the meaning of the restriction of subsection 47b. Given its normal intendment or ordinary understanding, the statutory language reasonably suggests that any lands owned by a municipality, if actually used for the enumerated purposes at the time of a Green Acres grant, will become subject to the restrictions of subsection 47b.

An analysis of the language of subsection 47b does not particularly support the narrower interpretation preferred by the Appellate Division. Nevertheless, the opposite results concerning statutory meaning reached by the lower courts on these facts suggest that the language of N.J.S.A. 13:8A-47b is amenable

to different constructions. To the extent that evidences an inherent ambiguity concerning the legislative meaning of "lands held by such local unit for such purposes," resort to aids to interpretation beyond the language of the statute is warranted. See State v. Churchdale Leasing, Inc., 115 N.J. 83, 101, 557 A.2d 277 (1989).

The history of an enactment can assist courts in determining legislative meaning. Brewer v. Porch, 53 N.J. 167, 174, 249 A.2d 388 (1969). The statutory antecedents of the current provision of subsection 47b are instructive for a sound understanding of its meaning. The precedent Green Acres Acts of 1961 and 1971 each required State approvals of future sales of those lands acquired with State-provided funding for Green Acres purposes. Thus, the 1961 Act provided:

Lands acquired by a local unit with the aid of a grant under this act shall not be disposed of or diverted to a use for other than recreation and conservation purposes without the approval of the commissioner [of the DEP's predecessor agency] and the State House Commission. [ N.J.S.A. 13:8A-13(a).]

The 1971 Act contained a similar provision, with the addition of a requirement for a public hearing. N.J.S.A. 13:8A-31a. Thus, those statutes had restricted the sale only of lands actually acquired with State funds. When the Legislature added subsection 47b in the 1975 Act, it extended the restriction to all conservation and recreational lands already owned by a municipality at the time it received State funds for additional acquisition or development. The inference to be drawn from this addition is that the Legislature intended to prevent municipalities from using State funds to purchase or develop new properties, while converting comparable existing lands to more profitable commercial or residential development. Thus, subsection 47b was designed to fulfill the Green Acres objective of augmenting the overall amount of land devoted to recreation and conservation, and to ensure that municipalities would preserve existing lands devoted to Green Acres uses, whenever they look to the State for Green Acres funding to acquire or develop

additional properties. The language of the subsection comports with that intendment.

Assistance in interpreting a statute can also be derived from the understanding of the administrative agency charged with enforcing it. In re Board of Educ. of Boonton, 99 N.J. 523, 534, 494 A.2d 279 (1985), cert. denied, 475 U.S. 1072, 106 S. Ct. 1388, 89 L. Ed. 2d 613 (1986); Peper v. Princeton Univ. Bd. of Trustees, 77 N.J. 55, 69-70, 389 A.2d 465 (1978). The meaning ascribed to legislation by the administrative agency responsible for its implementation, including the agency's contemporaneous construction, long usage, and practical interpretation, is persuasive evidence of the Legislature's understanding of its enactment. Malone v. Fender, 80 N.J. 129, 137, 402 A.2d 240 (1979); Smith v. Director, Div. of Taxation, 108 N.J. 19, 25-26, 527 A.2d 843 (1987).

Here, the legislative purpose of increasing the amount of land devoted to conservation and recreation is underscored by an examination of the course of administration of the Green Acres program by the DEP. The regulations in effect when South Toms River received Green Acres funding in 1978 required State-level approvals for the sale of any properties owned, dedicated, or maintained by the municipality for recreational purposes:

Upon receipt of an acquisition or development grant, other lands owned, dedicated or maintained for public recreation or conservation purposes by the local unit may not be diverted or disposed for uses other than those of public recreation or conservation without the prior approval of the commissioner and the State House Commission. [ N.J.A.C. 7:36-1.8(m) (1978).]

The regulation thus indicates that the language of N.J.S.A. 13:8A-47b, i.e., "held by such local unit for [recreational and conservation] purposes," is roughly synonymous with land "owned, dedicated or maintained" for such purposes. That administrative understanding is further confirmed by the agency practice and application as reflected by the provisions of its local grant contracts. ...

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