On appeal from the Superior Court of New Jersey, Chancery Division, Cape May County, C-057-02 and C-065-02.
Before Judges King, Lintner and Lisa.
The opinion of the court was delivered by: Lintner, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
These two consolidated cases arise from a final judgment of the Chancery Division declaring certain beach and ocean properties owned by Atlantis Beach Club (Atlantis) subject to the public trust doctrine but limiting the public's vertical (perpendicular to the ocean) and horizontal (parallel to the ocean) access to Atlantis's beach property. Although the judge did not place any limitations on the public's use of the ocean area, he permitted Atlantis to set a fee for such use subject to approval by the Department of Environmental Protection (DEP). He ordered DEP's approval to be based on a fee structure"commercially reasonable under all of the relevant circumstances."
The central issue to be decided here is to what extent, if any, can the public's right to horizontal and vertical access be limited to Atlantis's beach and ocean property given the unusual circumstances of this case. Ancillary issues are: (1) under what circumstances can a fee be charged by Atlantis to members of the public; (2) the standard to be used for determining the amount of the fee; and (3) whether the DEP should approve the fee in the first instance.
We hold that Atlantis cannot limit vertical or horizontal public access to its dry sand beach area nor interfere with the public's right to free use of the dry sand for intermittent recreational purposes connected with the ocean and wet sand. However, Atlantis may charge a fee to those members of the public who remain upon and use its beach for an extended period providing it cleans the beach, picks up trash regularly, and permits use of its shower facility. Atlantis must also provide customary lifeguard services for members of the public who use the ocean areas up to the high water mark regardless of whether they are just passing through or remaining on the beach area of its property. Finally, Atlantis may charge a fee, subject to DEP approval, that is reasonable and comparable to other beach tag charges in the region. In recognition of Atlantis's private status, such fees shall reflect an amount sufficient to cover costs of operation, which may include a reasonable amount of expenses incurred for management services.
We combine the procedural history with the substantially undisputed relevant facts. The subject property, Block 730.02, Lots 1.02 and 1.03 (the Atlantis property) (Appendix A), is located in Lower Township in what is known as Diamond Beach, which covers a residential area of roughly three blocks by nine blocks. Diamond Beach extends from the southern border of Wildwood Crest at Jefferson Avenue south to the southern border of Atlantis's property. Running eastward from a bulkhead that forms its westerly boundary, Lot 1.02 occupies approximately three acres comprised of dunes, a dry sand beach, and ocean floor. Lot 1.03, which shares the same north and south boundaries, is located to the east of Lot 1.02 and is completely under water at high tide. Both lots were formerly part of a larger tract of land encompassing an area of approximately 7767 acres of which 2450 acres are currently located in the ocean. This larger tract was conveyed by the State of New Jersey by way of a tidelands grant to the Cape May Real Estate Company in 1907.
Two four-story, multiple-unit condominium apartment buildings, La Quinta del Mar (La Quinta) and La Vida del Mar (La Vida), occupy the properties immediately to the west of the bulkhead. La Quinta occupies Block 735.02, Lot 1, and La Vida occupies Block 730.02, Lot 1.01. To the west of La Quinta is the Villa House and La Quinta Towers, both of which contain a significant number of residential units. La Quinta's lot continues along the same southerly boundary line as the Atlantis property while La Vida has the same northerly boundary. Raleigh Avenue's right-of-way runs between La Vida and La Quinta and has its easterly terminus at the bulkhead midway along the westerly boundary of Atlantis's property. A boardwalk pathway flush with the sand (the boardwalk) runs between the condominiums along the Raleigh Avenue right-of-way and continues through the bulkhead where it"doglegs" to the south as it crosses the dunes, terminating at the beach almost in the center of Atlantis's dry beach property. Atlantis maintains the portion of the boardwalk on its property as well as a seasonal gazebo adjacent to the boardwalk at its entrance.*fn1 The boardwalk and bulkhead are the only permanent structures on the property. According to Atlantis, the boardwalk pathway, which is depicted on a large undated map entitled"Beach and Dune Plan" (Appendix A), was approved by the DEP pursuant to the authority granted it by the Coastal Area Facility Review Act, N.J.S.A. 13:19-1 to -21 (CAFRA).*fn2
On July 31, 1986, developers of La Vida obtained the necessary permit from the DEP under CAFRA. Although the record is somewhat unclear, the subject property was apparently subdivided and acquired by Atlantis or its predecessor in title from either A.T.& L., Inc., developer of La Vida, or a predecessor in title, which sought to develop the tract.*fn3
Seapointe Village (Seapointe) is located to the north of La Vida. It is a large condominium and hotel complex comprised of over five hundred residential dwelling units and a one-hundred-room hotel occupying 63.4 acres, including the beach property to the north of Atlantis's property. It provides lifeguards for its beach property and maintains a public restroom facility, outdoor showers, and parking. Seapointe sells seasonal beach badges pursuant to a 1987 approval by the DEP's Division of Coastal Resources. Currently, Seapointe is before the DEP seeking an increase in the amount it is permitted to charge the public for use of its beach facilities. Seapointe does not deny either vertical or horizontal public access to its beach. The land immediately south of Atlantis, which is owned by the Federal Government, is essentially undeveloped and extends to the Cold Spring Inlet.
The Diamond Beach area comprises the only beach property fronting on the Atlantic Ocean located in Lower Township. Although Lower Township does not sell beach badges or regulate who can use its beaches, it controls by ordinance the beach area and the beach approaches within its jurisdiction. The ordinance, in pertinent part, makes it unlawful to:
(A) [play]... any game which endangers the health and safety of others, including... use of surfboards...;
(B) throw, place deposit or leave any bottles, glass, crockery, sharp or pointed article, or thing, paper, refuse or debris of any kind...;
(C) dress, undress or change clothing for bathing or other purpose in any... vehicle... regardless of whether the doing thereof is in public view...;
(D) possess... or to consume alcoholic beverages within the... beach and approaches thereof;
(E) revel, disport, or behave in a noisy or boisterous manner... so as to inconvenience others... disrupt and disturb the public peace and dignity within... the beach or approaches thereto;
(F) act in a loud, indecent, obscene, offensive or lascivious manner...;
(G) engage at any time... in the practice commonly known as"sleeping in cars." [Lower Township, N.J., Code §178-3 (amended 1981).]
Until 1996, the Atlantis beach and ocean property was open to the public. In the summer of 1996, Atlantis started to limit access to its beach and charge a minimum seasonal rate of $300 for six seasonal badges. By the summer of 2002, the fee jumped to $700 for a minimum of eight badges or $10,000 for a life membership. By contrast, Seapointe has no mandatory minimum and currently charges a single individual $2.50 per day, $10 per week, or $40 per season.*fn4 Atlantis placed a sign on the gate traversing the boardwalk pathway at the bulkhead blocking the Raleigh Avenue entrance to its beach. The sign reads:"FREE PUBLIC ACCESS ENDS HERE/MEMBERSHIP AVAILABLE AT GATE." As a result of condominium development, vertical access to the portion of beach that is the subject of this appeal is limited to the eastern terminus of Raleigh Avenue, Memphis Avenue, and Dune Drive.
According to several certifications filed by residents of La Quinta Towers at 300 East Raleigh Ave, people living in the condominiums adjoining Atlantis's property to the west,*fn5 who are not members of Atlantis, have to walk west on Raleigh to its intersection with Seaview Avenue then north along Seaview, crossing North Station Avenue where the sidewalk along Seaview ends, to Memphis Avenue or Dune Drive, which ends at the west gate of Seapointe. Walking north along Seaview, the first street providing access to the beach is Dune Drive, then Memphis Avenue. Access to the beach via Dune Drive entails an eight-block walk from Raleigh Avenue, a distance of approximately one-half mile.
The following warning appeared in Atlantis's 2003 Rules and Regulations:
ANYONE ATTEMPTING TO USE, ENTER UPON OR CROSS OVER CLUB PROPERTY FOR ANY REASON WITHOUT CLUB PERMISSION OR WHO IS NOT IN POSSESSION OF A VALID TAG AND AUTHORIZED TO USE SUCH TAG WILL BE SUBJECT TO PROSECUTION, CIVIL AND OR CRIMINAL TO THE FULLEST EXTENT ...