Fuentes, Julio M., J.s.c.
The opinion of the court was delivered by: Fuentes
FUENTES, JULIO M., J.S.C.
This condemnation action was commenced by plaintiff, the Borough of Essex Fells (borough), to acquire for a public park a 12.5 acre parcel of land currently owned by defendant, the Kessler Institute for Rehabilitation, Inc. (Kessler). Kessler has challenged the borough's authority to take the property on grounds that the stated public use is a pretext to exclude Kessler from the community. I conclude that the Borough of Essex Fells filed this condemnation proceeding in order to prevent Kessler from establishing a rehabilitation facility in the community. The Borough has thus acted in bad faith in exercising its power to condemn property and the complaint is therefore dismissed.
The facts are not largely disputed and are summarized from the submissions and arguments of counsel. The borough is a residential community in Essex County consisting of approximately 832 acres of which about 166 acres (20%) are devoted to municipal use, park land and open space. Most of the residences are single family dwellings situated on large, heavily wooded lots. Kessler is a not for profit, rehabilitation facility which provides treatment and services to persons with physical disabilities. Kessler has facilities in West Orange, East Orange and Saddle Brook.
Sometime in 1986 Kessler proposed expanding its services to include a Skilled Nursing Facility and a Transitional Living Facility. The Skilled Nursing Facility would accommodate sixty persons for the treatment of injuries or illnesses that require a less rigorous treatment program than is provided at most hospitals. The Transitional Living Facility would be a twenty unit residential facility to provide training in independent living skills necessary for community re-entry.
The Essex Fells site was identified by Kessler as an ideal location for these facilities. The tract is occupied by several buildings, and is currently zoned for educational use. It is located adjacent to the largest parcel of municipal land, a 68 acre site of heavily wooded land which contains the borough's wells and the water recharge area. Before Kessler purchased the property, it was owned and occupied for over 40 years by the Northeast Bible College ("Bible College"). In 1990, the Bible College ceased operations and offered the property for sale.
After the school closed, the borough expressed an interest in purchasing 2.53 acres of the property for use as a soccer field. The borough purchased this portion of the tract in 1991. As to the balance of the property, Borough officials were actively soliciting residential developers to acquire it for development of single family residences.
In December 1990, Dr. Harvey Moskowitz, the borough planner, prepared a report which determined that continued use of the property for educational purposes was appropriate, but that if that use proved unfeasible, the tract could be rezoned for residential use. The report did not recommend acquisition of the property by the Borough.
In the fall of 1991, Kessler learned about the Bible College land and buildings, and expressed an interest in purchasing the property. Soon thereafter, Bible College officials introduced Kessler representatives to the mayor and other borough officials. At this introductory meeting, the mayor informed Kessler that it had a difficult road ahead because "the town had never wanted anything but single family housing" at this site. In the spring of 1992, Kessler contracted to purchase the property.
Since the property was zoned for educational use, Kessler applied to the borough's Planning Board for a conditional use amendment to permit development of the proposed facility. Kessler was confident that it had satisfied the criteria for a variance based on its belief that the use it proposed for the property was inherently beneficial and particularly well suited to this site. Additionally, the New Jersey Department of Health had issued a Certificate of Need to Kessler for its twenty bed Transitional Living Facility for disabled persons and its sixty bed Skilled Nursing Facility to be established at this property.
In July and August 1992, Kessler made informal presentations on its initial plans at open meetings of the Essex Fells Planning Board. At these public meetings, it became apparent that there was resistance to the Kessler plan within the community. Citizens expressed concerns about the commercial nature of the Kessler proposal and the potential for increased traffic. In response to these concerns, Kessler modified its plans to reduce the scope of its programs and property development. On October 23, 1992, the sale contract between Kessler and the Bible College became final.
Thereafter, the Mayor and Borough Council retained the services of a planner and a land use attorney for the purpose of evaluating the suitability of this site for Kessler's proposal. Both experts deemed Kessler's development plans to be an appropriate use of the property which was consistent with the borough's Master Plan and zoning ordinances. Accordingly, the Mayor and Borough Council directed the experts to draft a conditional use amendment to the land use ordinance which would permit Kessler's proposed development of the property. By August 1993, a final draft of the land use ordinance was completed and slated to be introduced at a public hearing on October 5, 1993.
When it became public knowledge that borough officials were working on the conditional use amendment, opposition to Kessler's development plans intensified. A local organization known as the Essex Fells Preservation Committee (EFPC) was formed for the specific purpose of opposing the proposed development. In response to this heightened opposition, the Borough Council mailed an open letter to residents dated August 20, 1993, which informed ...