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New Jersey Turnpike Authority v. Forsgate Industrial Complex


August 6, 2007


On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. 905-04.

Per curiam.


Argued May 31, 2007

Before Judges Stern, Sabatino and Lyons.

Appellant, New Jersey Turnpike Authority ("NJTA"), appeals from a final judgment awarding respondent, Forsgate Industrial Complex ("Forsgate"), $3,954,000 as just compensation for the taking of property. NJTA also appeals from a denial of its motion to amend its pleadings to require the payment of certain taxes to be paid from the proceeds of the condemnation award. Because we find that the determinations of the trial court were based upon sufficient probative evidence and in accordance with law, we affirm.

The factual dispute underlying this matter concerns the February 2004 partial taking of vacant property by NJTA from Forsgate for the construction of a new exit ramp off the Turnpike. The subject property owned by Forsgate prior to the taking is adjacent to Exit 8A of the Turnpike in the Township of South Brunswick and is 32.38 acres. It is located in the Township's I-3 general industrial district. Forsgate also owns an adjacent lot which measures approximately ten acres.

NJTA filed a verified complaint with the Superior Court to exercise eminent domain over a 10.83-acre portion of the 32.38-acre tract of vacant land. After the taking, the lot is divided into two separate parcels, the larger portion measuring 16.32 acres and the smaller portion measuring 4.884 acres. The smaller parcel is bordered on all sides by public rights of way.

The court granted NJTA possession of the property and appointed commissioners to determine just compensation for the taking. NJTA estimated that proper compensation for the taking was $1,165,000 and deposited this amount with the Trust Fund Unit of the Superior Court. Following their analysis of the taking, however, the commissioners determined that an award of $2,850,000 was just compensation. Finding both values inadequate, Forsgate appealed the commissioners' award and the matter then proceeded to a de novo trial in the Law Division to determine the highest and best use of the property before and after the taking and the amount of just compensation due Forsgate.

Prior to the commencement of trial, however, the South Brunswick Tax assessor notified NJTA that a complaint to invoke roll-back taxes for tax years 2002 through 2004 had been filed with the Middlesex County Tax Board because the property was no longer qualified for farmland assessment, and thus was not exempt from taxation. After a hearing, the Board entered a judgment adding South Brunswick's roll-back assessment to the Omitted Tax List on the property. NJTA appealed the Board's judgment to the Tax Court and filed a motion with the Superior Court to amend its condemnation complaint to permit NJTA to pay the rollback taxes from the proceeds of the condemnation proceeding. Judge Robert Longhi denied the motion to amend. NJTA subsequently filed a motion for leave to appeal nunc pro tunc with our court which was denied.

The case was then assigned to Judge James P. Hurley for a bench trial on the issue of just compensation. Trial was held from February 6-9, 2006 and on February 14, 2006. Although this appeal presents several specific issues, the underlying issue concerns whether the trial court evaluated sufficient probative evidence to arrive at a just result.

Both parties agreed at trial that the highest and best use of the property before the taking was a full-service luxury hotel of 350 rooms, with a large banquet hall and meeting space.

Forsgate's before-taking concept plan was a 755,000 square foot, full-service hotel with a 19,500 square foot ballroom, 10,290 square feet of meeting space, a 6,300 square foot restaurant, 7,000 square feet of pre-function space and 1,750 square feet of retail space. The plan required all 42.9 acres of land and projected a hotel with a 17.33-acre footprint, consisting of three floors of rooms in a west wing, two floors of rooms in an east wing and two floors above a meeting corridor.*fn1 At trial, Forsgate's experts advised that to comply with the township's ordinance which would permit a hotel in a I-3 zone as a conditional use ("Section 62 ordinance"), approximately 1,196 parking spaces would be required and between 1,200 and 1,280 spaces would be appropriate.

The Section 62 ordinance (section 62-1427 of the South Brunswick Zoning Code) is entitled, "Uses permitted as conditional uses," and outlines conditional uses permitted in the township's I-3 general industrial district. "Lodging Accommodations" is listed among the conditional uses permitted by this ordinance.*fn2 Pursuant to this section, a lodging accommodation must meet numerous requirements to be permitted in an I-3 zone. Among these requirements are the following parking conditions: (1) one parking space per guest room; (2) one parking space per employee (based upon the shift having the most employees); (3) one parking space for every three restaurant seats or one space for every fifty square feet devoted to such use (whichever is greater); and (4) one space for every 200 square feet of retail space. The Section 62 ordinance also contains a shared parking provision which allows minimum parking to be reduced, "upon such recommendation that shared parking is feasible, likely and absolute." South Brunswick Land Use Ordinance, Ch. 62 § 62-1427(2)(i), October 2005.

The before-taking concept plan of NJTA also envisioned a 350-room, full-service hotel, but on a thirty-two acre campus. The hotel would be a six-story building and would include 25,652 square feet of conference space. NJTA's engineers concluded that a full-service, 350-room hotel would require only two parking spaces per room, or 700 spaces, leaving space for a 237,837 square foot industrial building with associated parking and loading space on the remaining subject lot. NJTA's expert planner, Paul Phillips, testified that shared parking under the Section 62 ordinance was likely, feasible and adequate and that it was reasonably probable that the planned 350-room full- service hotel would be approved with a provision for 700 parking spaces both before and after the subject taking.

The trial court examined both plans and determined that Forsgate's before-taking concept design was legally permissible, physically possible, and financially feasible. The court approved of its before-taking plan that included a 350-room, full-service hotel with a conference room and ballroom. It found NJTA's plan to be "unrealistic" on several grounds.

First, the trial court determined that NJTA's plan was incompatible with a forty-foot height restriction imposed by another township ordinance. Second, the trial court found that NJTA's parking lot design was not feasible because it relied upon the assumption that the township would permit a waiver for a reduction of parking spaces from approximately 1,200 parking spaces to 700. Consequently, the trial court relied upon Forsgate's before-taking plan in its determination.

At trial, the parties presented after-taking designs for the court's consideration. Forsgate's experts projected that after the taking, they would be restricted to the construction of a 200-room, limited-service hotel with 14,000 square feet of meeting space and a 4,500 square foot lobby on the 27.3-acre portion of the site remaining.*fn3 The limited-service hotel would offer a small retail space but would not have a ballroom or a banquet hall. It would, however, include a pool and exercise space. Forsgate estimated that under the township's Section 62 ordinance, the limited-service hotel would have to provide 693 parking spaces. In addition to the limited-service hotel, Forsgate's after-taking design included a 35,000 square foot industrial building on the smaller, 4.884-acre remainder of the lot.

NJTA's after-taking concept plan provided for a 350-room, full-service hotel which would be six stories high and built upon the 16.32-acre northerly portion of the remainder of the property. The hotel would offer 25,652 square feet of conference space and would have 700 parking spaces. On the smaller, 4.884-acre remainder of the property, NJTA planned a 46,000 square foot industrial building with a small parking lot and loading area.

The trial court evaluated both plans and determined that after the taking, a 200-room, limited-service hotel offering a pool, limited meeting rooms, a restaurant and retail shops was the highest and best use of the property. The limited service hotel, in the court's view, would require 693 parking spaces. In its after-taking determination, the court also found that only the plan for an industrial warehouse for the smaller, 4.884-acre lot would be approved. It held that Forsgate's proposed 35,000 square foot industrial building would not be the highest and best use and found that a warehouse between 40,000 to 46,000 square feet could be developed on the smaller lot.

The trial court found NJTA's after-taking concept plan unrealistic, particularly with regard to parking requirements, because the plan rested on the assumption that a variance or waiver for fewer parking spaces than required by the Section 62 ordinance would be granted. The court noted, as an example, that a strict interpretation of the parking requirements as a conditional use under the Section 62 ordinance would require approximately 1,200 spaces for NJTA's concept plan. The court stated that a variance or waiver reducing the number of spaces from 1,200 to 700 was unlikely. The court, in evaluating the realistic probability of a variance from 1,200 to 700 parking spaces also noted that if the Section 62 ordinance, which would require about 1,200 parking spaces, were found not to apply as a result of the passage of ordinance 18-00, which NJTA argued repealed the Section 62 ordinance, that the amount of parking required pursuant to ordinance 18-00 would be 2,067 spaces for a 350-room hotel.*fn4 The court stated that these two ordinances, "support the conclusion that a variance or waiver [seeking 700 spaces] for less than the number of spaces required by section 62-1427(2)(i) [1,200] would not be granted" when the standard parking ordinance that would apply in the absence of the Section 62 ordinance permitted use would require 2,067 spaces.

The court later held that ordinance 18-00 did not repeal the Section 62 ordinance and that the provisions of the Section 62 ordinance controlled in this case. The court analyzed the two ordinances as follows:

. . . The question then is does ordinance number 18-00 . . . repeal section 62-1427[2][I], for purposes of this case and only this case, the court holds that it does not. Ordinance 18-00 contains the general parking regulations applicable to the zones mentioned therein[,] among them the I[-]3 zone. A general rule [of] interpretation is that a specific provision and ordinance [Section 62 ordinance] trumps a general provision [ordinance 18-00]. Ordinance number 18-00 amends parking provisions for "hotels" in the I-3 zone. Although "hotels" are not specifically listed as a permitted or conditional use [in subdivision "XXIX. I-3 General Industrial District"]. "Lodging accommodations" is listed as a permitted conditional use . . . This Court concludes that ordinance 18-00 was not adopted with the intent to repeal section 62-1427[2][I] therefore the conditional use standards for parking apply regardless of the amendment.

Having ruled on the highest and best uses of the property before and after the taking, the court next considered the impact of the taking on the value of the property. We, therefore, focus our discussion on the submitted valuation analyses.

In analyzing the value of the property before and after the taking, the sales comparison method was utilized because the property consists of vacant land. This approach requires the appraiser to analyze land sale figures of comparable properties in the same market, or comparables, to determine the appropriate value of the subject property.

At trial, Forsgate presented its expert, Raymond Cirz, a licensed real estate appraiser, to discuss its valuation estimates before and after the taking. In his analysis, Cirz examined four comparable land sales, all of limited-service hotels, making adjustments where appropriate.*fn5 After applying the adjustments, Cirz concluded that the net valuation for the four comparables ranged from $22,000 to $24,000 per room. He concluded that the property in question was valued at $23,000 per room and arrived at a before-taking value of $8,050,000 for 350 rooms.

Cirz also conducted an after-taking analysis of the property on behalf of Forsgate. He testified at trial that the local market could support another 200-room, limited-service hotel at seventy-five percent occupancy. To evaluate Forsgate's after-taking plan, he utilized the same comparables used in his before-taking study. He also considered that the after-taking plan by Forsgate did not include a banquet hall or ballroom. Cirz used the Smith Travel Research manual to evaluate the difference in net income between limited and full-service hotels. He determined that Forsgate's after-taking hotel would be twenty-five percent less profitable per room than its before- taking hotel based upon the difference in average net income per room for full-service banquet hotels (approximately $41 per night) and limited-service hotels (approximately $33 per night). He opined that the after-taking value of the proposed limited-service hotel would be approximately $15,000 per room for a total after-taking value of $3,000,000.

As to the smaller, 4.884-acre remainder, Cirz utilized three comparable land sales ranging in value between $7.19 to $8.23 per square foot and concluded that the reasonable value for Forsgate's proposed industrial building was $8.00 per square foot. He adjusted downward approximately twenty percent due to the cost and risk of having to obtain zoning variances for the plan. After applying the adjustment, he concluded that the appropriate after-taking valuation for the warehouse was $6.40 per square foot or $225,000 for a 35,000 square foot building. The total value of the cumulative after-taking plan, therefore, was $3,225,000. Subtracting the before-taking value of $8,050,000 from the after-taking value of $3,225,000, Forsgate concluded that just compensation for the taking would be $4,825,000.

NJTA presented its own valuation analysis through the testimony of William Steinhart, an expert appraiser. In his before-taking analysis, Steinhart used five comparable hotel sales, including the Bridgewater Marriott, a full-service hotel with a conference center. He determined that the fair market value of the sale in question was $12,500 per developable guest room, thus, a before-taking valuation of $4,375,000 for a 350-room full-service hotel. Steinhart then evaluated the before-taking value of the smaller, 4.884-acre parcel by analyzing three industrial land sale comparables. Steinhart concluded that the appropriate value for the subject remainder property was $8.50 per square foot of potential permitted building area or $2,020,000 for the industrial land. Thus, NJTA submitted that the before-taking value for the hotel property and the remainder projected in its plan was $6,400,000.

Steinhart also evaluated the value of NJTA's after-taking concept plan. Using the same comparables in his before-taking analysis, Steinhart determined that the value of the projected 350-room hotel was $12,500 per developable room, or $4,375,000. Steinhart then measured the planned, after-taking industrial building and opined that the industrial land was worth $6.80 per square foot of potential building area, or $312,800. After rounding the figures, Steinhart concluded that the after-taking fair market value was $4,690,000. Subtracting the before-taking value of $6,400,000 from the after-taking value of $4,690,000, Steinhart and NJTA arrived at a just compensation figure of $1,710,000 for the acquisition.

The trial court evaluated the parties' figures and rendered just compensation in the sum of $3,954,000. The court found that a hotel situated at interchange 8A of the Turnpike offering full-service accommodations including meeting space and a banquet facility was unique to the market. In its before-taking analysis, it accepted all of the comparables utilized by Cirz as well as one limited-service hotel comparable of NJTA. Despite its being the only full-service comparable presented, the trial court disregarded NJTA's Bridgewater Marriott sale because it found that Steinhart's business partner had used the sale in another appraisal study and reported a significantly higher value per room than what Steinhart presented.*fn6 At trial, Steinhart was unable to account for the discrepancy and when questioned about the difference in value, advised the court that it should seek clarification from his business partner. The court consequently found the Bridgewater Marriott land sale to be unreliable.*fn7 The court found that the adjusted values from all considered comparable properties ranged from $22,100 through $27,457 per room and averaged $25,822 per room. The court applied a positive ten percent adjustment to Forsgate's comparable property sales figures for the subject property's superior location, a positive ten percent adjustment for time between the sale of those comparables and the February 2004 date of valuation, a positive twenty-five percent adjustment to two limited service comparable properties*fn8 and a twenty percent adjustment to another limited service comparable property for the proposed hotel's superior use. Following its application of these adjustments, the court concluded that the before-taking value of the full-service hotel was $23,500 or $8,225,000 for 350 rooms.

With regard to the after-taking valuation, the trial court concluded that the adjusted after-taking values of the accepted comparable properties were between $12,526 and $21,463 per unit and averaged $17,808 per unit. The court determined that the after-taking value of a limited-service hotel on the subject property was $19,400 per room or $3,880,000 for 200 rooms. With regard to the valuation of the smaller remainder parcel, the court accepted NJTA's valuation of $8.50 per square foot of permitted building area, or $391,000. Combining the after-taking hotel value of $3,880,000 with the after-taking value of $391,000 for the industrial building, the court arrived at a total after-taking value of $4,271,000. Subtracting the before-taking value of $8,225,000 from the after-taking value of $4,271,000, the court found that total just compensation for the taking was $3,954,000. Having rendered its decision concerning fair and just compensation for NJTA's taking, the court entered final judgment on March 26, 2006.

NJTA challenges the court's holding, arguing that ordinance 18-00 governs the property in question and its valuation. Specifically, NJTA asserts that the Section 62 ordinance was repealed by ordinance 18-00, and, therefore, 2,606 parking spaces would be required for the 350-room hotel depicted by Forsgate's concept plan. NJTA submits on appeal that there would not be sufficient land to accommodate the full-service hotel and 2,606 parking spaces, rendering Forsgate's concept design physically impossible to construct on the subject property and its pre-taking value inappropriate. Thus, NJTA argues that determining the just compensation due to Forsgate requires a valuation analysis of the property as vacant land for industrial development both before and after the taking. NJTA, however, never submitted a valuation of the property as exclusively vacant industrial land and now asserts on appeal that because the trial court never considered such a valuation, the award of just compensation was erroneous.

NJTA timely filed its appeal and presents the following issues for our consideration:












NJTA argues on appeal that the trial court erred by ruling that the general repeal of ordinance 18-00 did not repeal the specific I-3 parking standards contained in the Section 62 ordinance. NJTA also argues that the court contradicted itself by concluding that ordinance 18-00 did not apply to the subject property in the before condition but later rejected the testimony of NJTA's expert planner, Phillips, on the ground that ordinance 18-00 applied to the property's parking requirements after the taking.

Forsgate submits that the general repeal made by ordinance 18-00 amended the general parking requirements for hotels but did not repeal the specific parking provisions of the Section 62 ordinance. Forsgate also argues that NJTA's argument concerning the repeal of the Section 62 ordinance is precluded by the doctrine of judicial estoppel and additionally asserts that the trial court did not contradict itself by relying upon ordinance 18-00 to reject the opinion of NJTA's expert planner.

The trial court found that ordinance 18-00 amended the general, off-street parking requirements contained in the Township Land Use Code ("Code") but did not amend the specific, conditional use parking provisions found in the Section 62 ordinance. Finding that the parking requirements of the Section 62 ordinance applied and that much of NJTA's planner's testimony was unreliable, the court rejected the opinion of NJTA's planner that the number of required parking spaces could be significantly reduced via a variance or waiver.

We agree with the statutory interpretation made by the trial court in analyzing the effects of ordinance 18-00 upon the Section 62 ordinance. It is clear from a review of the two ordinances that ordinance 18-00 was intended to amend only the general "Off-street parking and Loading Design Standards" found in Article XI, Section 175-115 of the Land Use Code, which, in addition to various other uses, governs minimum parking space requirements for hotels.*fn9 Ordinance 18-00 also amended the Code's general off-street parking requirements for the I-3 general industrial district. See South Brunswick Land Use Ordinance, Ch. 62 § 62-1432, October 2005. However, a plain reading of ordinance 18-00 does not indicate that the Section 62 ordinance governing requirements for permitting a hotel as a conditional use in an I-3 zone, was repealed or amended. Ordinance 18-00, a general repealer regarding off-street parking, was intended to modify the existing general requirements for off-street parking and never addressed the specific conditional use provisions of the Section 62 ordinance. Thus, we agree with the statutory interpretation of the trial court that the Section 62 ordinance was not repealed by ordinance 18-00.

In addition, the testimony adduced at trial, particularly that of NJTA's engineer, supports the trial court's conclusion that ordinance 18-00 did not repeal the Section 62 ordinance. NJTA's engineer testified that based upon his discussions with the township's planning staff, ordinance 18-00 did not repeal the Section 62 ordinance, but amended the general parking standards in all of the township zones listed therein; the conditional use criteria of the Section 62 ordinance specific to the I-3 zone continued to determine the parking requirements for the subject site. This testimony provided strong insight as to the intended effects of ordinance 18-00.

We are further satisfied by the trial court's determination that ordinance 18-00 did not repeal the Section 62 ordinance from our review of the Code itself. While applicable amendments made to the Code as a result of ordinance 18-00 were incorporated into the most recent version of the Code, no such incorporation was ever made to the Section 62 ordinance after ordinance 18-00 was adopted.*fn10 Although the current code deleted prior parking regulations from sections revoked by ordinance 18-00, the current version of the code still includes the conditional use requirements of the Section 62 ordinance, as does the subsequently published June 2005 and October 2005 supplement to the 2004 edition. In fact, the only section of subdivision 29 of Chapter 62 of the Code which indicates an amendment by ordinance 18-00 is the section governing general off-street parking requirements, that is, section 62-1432. Had the town council intended to repeal the Section 62 ordinance, it would have specifically codified its repeal and amended its code to reflect that change.

Although it relied upon the provisions of the Section 62 ordinance throughout the course of trial, NJTA essentially argues on appeal that ordinance 18-00 impliedly repealed the Section 62 ordinance, rendering its parking provisions inapplicable in this case. We, however, note the long-established principle that, "[t]he law does not favor implied repealers and if . . . it is possible to construe the [ordinances] so that all of the provisions of each are effective, that is the cause to pursue." Jamouneau v. Murphy, 130 N.J.L. 498, 502 (Sup. Ct.), aff'd, 131 N.J.L. 39 (E. & A. 1943); see also State v. Stratis Comm'l Corp., 165 N.J. Super. 158, 161 (App. Div. 1979) (holding, "In the absence of a clear legislative intent, courts will not indulge in inferential repeals of a statute; every reasonable construction will be applied to avoid such a result.") "[I]mplied repealers are disfavored. A conclusion that a repeal has occurred requires clear and compelling evidence, free from reasonable doubt that the Legislature intended a repeal." Jackson Twp. Bd. of Educ. v. Jackson Educ. Assoc., 334 N.J. Super. 162, 171 (App. Div.), certif. denied, 165 N.J. 678 (2000)(citations omitted).

NJTA has failed to clearly and convincingly demonstrate that the South Brunswick Township Council intended a repeal of the Section 62 ordinance. Rather, our review of the provisions reveals that the Section 62 ordinance and ordinance 18-00 are not contradictory but were intended to "cover separate and distinct areas of legislative and judicial action." French v. Bd. of City Commr's, 136 N.J.L. 57, 58 (Sup. Ct. 1947). The Section 62 ordinance was intended to govern specific conditional uses, while ordinance 18-00 was intended to amend general off-street parking provisions. Accordingly, the trial court did not err in its interpretation.

We are further satisfied that the review of the ordinances by the trial court was reasonable and did not offend the interests of justice such that reversal is warranted. See Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974); Fagliarone v. Twp. of North Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963). The court based its analysis on credible expert testimony given at trial and upon a careful and reasoned analysis of the ordinances in question.

Moreover, we disagree that the court contradicted itself by referencing ordinance 18-00 to reject the testimony of the expert planner of NJTA. The planner opined at trial that a reduction from the 1,200 parking spaces required by the Code to 700 spaces would likely be approved by the local zoning board. The court rejected his opinion, finding that, "a waiver for a reduced number of parking to approximately 700 is unlikely" and, to place its holding into perspective, stated "[a]n examination of ordinance 18-00 clearly indicates that if it were applicable to this site, in excess of 2,000 parking spaces would be required for a hotel." The court, in making reference to ordinance 18-00, was not making a legal application of its provisions as NJTA asserts, but referred to ordinance 18-00 to illustrate that because South Brunswick was generally increasing its parking requirements throughout the township, its zoning board was unlikely to decrease the number of spaces as dramatically as projected by NJTA's planner. Indeed, the court based its decision to reject the planner's testimony on several other grounds.

The planner's opinion was, in large part, unsupported and unreliable. During cross-examination, the planner admitted that he conducted the shared-parking analysis without first examining engineering or surveying plans. The planner also did not have a clear definition concerning the standards applicable to the term, "shared parking" with respect to South Brunswick's land use ordinance. In addition, although he admitted being aware of shared parking ordinances in several municipalities "where there is an actual standard in terms of the percent reduction [in spaces]," the planner did not note the standard by which the parking spaces required for the proposed hotel could be reduced from 1,200 parking spaces to 700. In fact, the planner admitted at trial that as far as he was aware, South Brunswick never applied a shared provision to a hotel's parking requirements.

The court also rejected the planner's opinion based upon the assessments of other experts who testified at trial concerning the possibility of a variance or waiver and the shared parking provision in question. Forsgate's expert planner testified that according to the director of planning in South Brunswick, the shared parking provision had never been applied to a "stand-alone site" and that the municipality never applied a shared parking provision to a hotel. Forsgate's planner also testified that it was unlikely that the zoning board would permit the reduction in required parking spaces because it represented a "huge deviation" from the Code's requirements. Similarly, the court based its rejection of the opinion of NJTA's planner upon the testimony of Forsgate's engineer who noted that providing 700 spaces when over 1,200 were required was unrealistic and would clearly violate the township's parking regulations. In addition, the trial court found the opinion of NJTA's planner unreliable because it assumed that the maximum number of parking spaces required would be at 9:00 p.m. rather than at earlier times when conference rooms and banquet halls were more likely to be in full use. Accordingly, we are satisfied that the trial court based its rejection of the planner's shared parking analysis on evidence in the record and not exclusively on ordinance 18-00.

Having addressed NJTA's assertions regarding the application and validity of the ordinances' provisions, we turn to Forsgate's claim that defendant is precluded by judicial estoppel from asserting that ordinance 18-00 repealed the Section 62 ordinance. Judicial estoppel "only arises when a party advocates a position contrary to a position it successfully asserted in the same or other proceeding." Kimball Int'l v. Northfield Metal Prods., 334 N.J. Super. 596, 606 (App. Div. 2000), certif. denied, 167 N.J. 88 (2001). In this case, NJTA did not successfully assert its position nor did it "convinc[e] the court to accept its position in the earlier litigation." Id. at 606-07. Thus, judicial estoppel does not preclude NJTA from making its argument. We note, however, that while judicial estoppel "does not preclude inconsistent positions from being pleaded in the alternative," NJTA's reliance on appeal that ordinance 18-00 repealed the Section 62 ordinance is inconsistent with the pleadings and its experts' reports and testimony. See R. 4:5-2; Cummings v. Bahr, 295 N.J. Super. 374, 386 (App. Div. 1996). NJTA presented no plan for solely industrial buildings before or after the taking. Its argument, while not barred by judicial estoppel, appears to be a last-minute unsupported paradigm shift to afford it a "second bite at the apple."

We disagree, therefore, with NJTA's assertion that the Section 62 ordinance has been repealed by ordinance 18-00 because we concur with Judge Hurley's logic. The explicit provisions of Section 62 permit a conditional hotel use provided numerous conditions, including but not limited to parking, are met while ordinance 18-00 appears to merely address general parking requirements in variance zones. Forsgate's assertion of judicial estoppel, however, is without merit.


NJTA asserts that the trial court committed reversible error by relying upon the highest and best use analysis made by Forsgate's expert appraiser, Cirz. It submits that the analysis accepted by the court was erroneous because Cirz did not apply the four-part test for highest and best use in proper sequential order. Specifically, NJTA contends that Cirz improperly applied the financial feasibility and maximal productivity elements of the highest and best use analysis before considering the physical possibility and legal permissibility of Forsgate's before-taking and after-taking concept plans. NJTA also argues that the highest and best use analysis made by Cirz and utilized by the court failed to consider whether it was possible to construct anything larger than a limited service, 200-room hotel after the taking on the site.

Forsgate submits that Cirz's analysis was reliable and that he considered the legal permissibility and physical possibility of Forsgate's concept plans by reviewing information from qualified architectural and engineering professionals. With regard to the after-taking plan specifically, Forsgate argues that highest and best use of the property, contrary to NJTA's assertions, does not depend upon the size of the project, but upon the use of the property which produces the highest value.

The court considered NJTA's and Forsgate's before-taking analyses and found Forsgate's plan to be a more realistic, "legally permissible and physically possible" assessment of the highest and best use of the property because NJTA's hotel was designed as a six-story building which would violate South Brunswick's height restrictions. The court also found Forsgate's before-taking plan to be "financially feasible." With regard to the after-taking plans, the court rejected NJTA's concept plan due to the township's height restrictions and determined that Forsgate's proposed, 200-room limited service hotel was the highest and best use of the property.

The initial step to determine fair market value in connection with a condemnation proceeding is identifying the property's highest and best use at the time of the taking. State v. Caoili, 135 N.J. 252, 260 (1994). "In order for a particular use to be the highest and best it must be: (1) legally permitted, (2) physically possible, (3) economically feasible, and (4) the most profitable." Ford Motor Co. v. Edison Twp., 10 N.J. Tax 153, 161 (Tax 1988), aff'd, 12 N.J. Tax 244 (App. Div. 1990), aff'd, 127 N.J. 290 (1992); see also City of Jersey City v. Twp. of Parsippany-Troy Hills, 16 N.J. Tax 504, 511-12 (Tax 1997), aff'd, 17 N.J. Tax 538 (App. Div. 1998); Schimpf v. Little Egg Harbor Twp., 14 N.J. Tax 338, 344 (Tax 1994). Courts have recognized that:

[t]hese criteria are often considered sequentially. Tests of legal permissibility and physical possibility must be applied before the remaining tests of financial feasibility and maximal productivity. A use may be financially feasible, but this is irrelevant if it is physically impossible or legally prohibited. Only when there is a reasonable possibility that one of the prior, unacceptable conditions can be changed is it appropriate to proceed with the analysis.

[Mori v. Town of Secaucus, 15 N.J. Tax 607, 619 (Tax 1996), rev'd & remanded on other grounds, 17 N.J. Tax 96 (App. Div. 1997)(quoting The Appraisal of Real Estate 280 (10th ed. 1992)(emphasis in original).]

"A property's highest, best and most profitable use is a factual matter." McElwee v. Ocean City, 7 N.J. Tax 355, 361 (Tax 1985).

We find that there is adequate support in the record which demonstrates that all four points were appropriately considered by the trial court. The trial court based its factual determinations concerning the highest and best use of the property before and after the taking upon substantial, credible evidence. Having heard expert testimony from appraisers for both NJTA and Forsgate, the trial court determined that NJTA's concept plans were not legally permissible or physically possible because of height restrictions imposed by the township. The trial court, however, found that Forsgate's after-taking plan "can be developed consistent with [the Section 62 ordinance]" and thus, considered its legal permissibility and physical possibility before any other factors.

We are also satisfied by our review of the record that the trial court did not err by relying upon Cirz's analysis in its determination. It is clear that Cirz considered the legal and physical possibility of Forsgate's before-taking and after-taking concept plans by consulting with, and receiving information from, qualified architectural and engineering experts. Although NJTA points to Cirz' analysis of the after-taking concept plan as erroneous because he did not consider whether it was possible to build anything larger than a 200-room limited-service hotel on the site, we note that the highest and best use of the property is not the largest project that may be built upon a site, but "that use which at the time of the appraisal . . . is the most profitable likely use or produces the highest property value." Ford, supra, 10 N.J. Tax at 161; see also Inmar Assocs. v. Edison Twp., 2 N.J. Tax 59, 64-65 (Tax 1980). Accordingly, there is adequate support in the record to sustain the findings of the trial court.


NJTA submits that the trial court committed reversible error when it found Steinhart's testimony regarding the sale of the Bridgewater Marriott, the only full-service comparable submitted into evidence, not credible and disregarded the sale in determining the value of the property. NJTA also complains that the trial court improperly allowed Forsgate to cross-examine Steinhart which resulted in the finding that Steinhart's comparable sale valuation of the Bridgewater Marriott was inconsistent with a prior appraisal performed by Steinhart's business partner and was, therefore, unreliable.

Forsgate contends that the trial court's rejection of the Bridgewater Marriott sale did not result in reversible error because the trial court properly found the sale to be unreliable on several grounds. Forsgate asserts that the sale would have resulted in an incorrect valuation had the court adopted it because it was located in a market different than the subject property and because the former owner of the Bridgewater Marriott was under a mandate to liquidate, rather than develop, the property. Forsgate also argues that the court did not err in permitting cross-examination of Steinhart concerning the Bridgewater Marriott sale because an objective fact as to the reliability of the evidence was in dispute.

The trial court found the Bridgewater Marriott land sale an unreliable comparable and rejected its use based upon the unexplained discrepancy in values estimated by Steinhart and his business partner, as well as the facts behind the sale of the Bridgewater Marriott, particularly the prior owner's need to liquidate the property. The trial court permitted the cross-examination of Steinhart on the ground that Steinhart admitted at trial that he and his partner used the same property "bank" that his firm maintained, and because an objective fact regarding the reliability of the evidence was in question.

We have held that, "by far, the most satisfactory proof of such value - i.e., what a willing buyer would offer a willing seller - in a condemnation action is comparable sales." State v. Vacation Land, 92 N.J. Super. 471, 478 (App. Div. 1966). The determination of the comparability or non-comparability of sales referred to by expert appraisers concerning value is "committed to the sound discretion of the trial judge." Ocean County v. Landolfo, 132 N.J. Super. 523, 528 (App. Div. 1975).

In this case, the trial court, as finder of fact, did not commit reversible error but was acting within its discretion when it disregarded the Bridgewater Marriott comparable because there were unanswered questions regarding its reliability. It is a well-established principle that, "a judge is not obligated to accept an expert's opinion . . . [t]he factfinder may [] accept some of the expert's testimony and reject the rest . . . and may do so even if that testimony is unrebutted by any other evidence." State v. M.J.K., 369 N.J. Super. 532, 549 (App. Div. 2004), appeal dismissed, 187 N.J. 74 (2005); see also State v. Spann, 236 N.J. Super. 13, 21 (App. Div. 1989), aff'd, 130 N.J. 484 (1993)(holding that a factfinder may adopt so much of an expert's opinion, "as appears sound, reject all of it, or adopt all of it.").

The court based its rejection of the Bridgewater Marriott sale upon substantial and legitimate grounds. We agree that the reliability of the Bridgewater Marriott sale, as a comparable, was questionable. Steinhart, for example, was unable to render a reasonable explanation regarding how his business partner arrived at a significantly higher value for the sale when he prepared a report for another unrelated matter. In addition, the background of the Bridgewater Marriott sale raised questions about its reliability and would likely have undermined the valuation analysis of the court in this case. Moreover, the trial court determined, in its discretion, that the Bridgewater Marriott is located in a different market than the subject property.

NJTA submits that it was improper for the court to allow Steinhart to be cross-examined concerning the discrepancy of values given by him and his business partner. However, we are satisfied that the trial court permitted cross-examination because there were questions concerning the valuation of the Bridgewater Marriott sale and the values ascribed to it. The court in this case did not abuse its discretion, did not commit reversible error and "was under no obligation to accept as completely true the testimony of any expert witness." Vacation Land, supra, 92 N.J. Super. at 478.


NJTA next asserts that the twenty-five percent upward utility adjustment calculated by Cirz to compensate for the difference in use from a limited-service hotel to a full-service hotel was improperly relied upon by the trial court because it was unsupported by objective evidence and constitutes a net opinion. Forsgate defends that the adjustment was supported by sufficient evidence, did not constitute a net opinion and accurately reflected the economic difference between a limited-service hotel and a full-service hotel. The trial court held that the twenty-five percent upward utility adjustment was reasonable to the before-taking analysis because it satisfactorily compensated "for the difference in use from a very limited service hotel to a full-service hotel."

"Adjustments, if they are to be of use to the court in determining value, must be supported and justified." Schmertz v. Twp. of Dover, 4 N.J. Tax 145, 150 (Tax 1982). The weight a court must give to an expert appraiser's opinion depends, "especially on the facts and reasoning which are the foundation of [his or her] opinions." Id. at 151; see also Passaic v. Gera Mills, 55 N.J. Super. 73, 90 (App. Div.), certif. denied, 30 N.J. 153 (1959).

N.J.R.E. 703 requires that an expert's opinion be based on facts, data or other opinions, either perceived by, or made known to, the expert, at or before trial. Buckelew v. Grossbard, 87 N.J. 512, 524-25 (1981), on remand, 189 N.J. Super. 584 (Law Div.), aff'd, 192 N.J. Super. 188 (App. Div. 1983); Nguyen v. Tama, 298 N.J. Super. 41, 48-49 (App. Div. 1997). Under the "net opinion" rule, an opinion lacking in such foundation and consisting of bare conclusions unsupported by factual evidence is inadmissible. Johnson v. Salem Corp., 97 N.J. 78, 91 (1984). The court requires an expert "to give the why and wherefore" of his or her opinion, rather than a mere conclusion. Jimenez v. GNOC Corp., 286 N.J. Super. 533, 540 (App. Div.), certif. denied, 145 N.J. 374 (1996).

We are satisfied that the upward utility adjustment applied by the court was not arbitrary but was made after careful study and consideration of varying hotels and rates. Cirz, for instance, conducted a thorough analysis of limited and full-service hotel rates, considered the markets involved, and based the adjustment upon expert opinions that a limited service hotel is less profitable than a full-service hotel. He considered that in the after-taking scenario, Forsgate would no longer be able to demand as high a daily rate per guest room, would not profit from as many rooms, and would not receive income from a banquet facility. Specifically, he determined that Forsgate's after-taking hotel would be twenty-five percent less profitable per room than its before-taking hotel based upon the difference in average net income per room for full-service banquet hotels (approximately $41 per night) and limited-service hotels (approximately $33 per night) according to a Smith Travel Research Report, a source that has not been proven to be unreliable or disreputable. We conclude therefore, that the court's application of the adjustment was not in error but was adequately supported by evidence in the record.


NJTA's final point of appeal is that the pre-trial court erred by denying its motion to amend its verified complaint to permit roll-back taxes to be paid out of the condemnation award. It submits that Forsgate was a land speculator that expressed its intention to develop the property into a hotel and conference center, thereby losing its tax exemption under the Farmland Assessment Act, N.J.S.A. 54:4-23.1 to -23.24 (the "Act"), and making it liable for two-years of roll-back taxes under the Act. NJTA argues that the roll-back taxes should be paid out of the compensation award as suggested by case law.

Forsgate submits that it is not liable for the payment of roll-back taxes out of the compensation award because it was NJTA's taking that rendered the farmland assessment exemption inapplicable to the property. Forsgate notes that it farmed the property and qualified for the exemption prior to NJTA's partial taking and, in fact, continues to farm the remainder parcel. Forsgate asserts that the pre-trial court properly denied NJTA's motion because the roll-back taxes must be paid directly by the condemnor and not from the condemnation proceedings. The motion judge agreed with Forsgate and denied the motion to amend, rejecting NJTA's argument that roll-back taxes must be paid out of the condemnation award.

The Act provides that when land ceases to be used for farmland purposes, such land shall be subject to roll-back taxes for the year in which the change in use occurs and the two prior years. See N.J.S.A. 54:4-23.8. "[T]he concept of farmland assessment and special tax treatment was intended to give the farmer the incentive to continue to farm his land and to discourage the land speculator." Gardiner v. State of New Jersey, 196 N.J. Super. 529, 532 (Law Div. 1984). With regard to public takings of land, we have held:

In the Farmland Assessment Act the Legislature has accorded a tax benefit to those using land for agricultural or horticultural purposes but requires some repayment when the use of the land is changed, irrespective of the nature of the new use - - e.g., highways - - or the status of the person owning the land at the time of the change in use. [New Jersey Tpk. Auth. v. Twp. of Washington, 137 N.J. Super. 543, 547 (App. Div. 1975), aff'd, 73 N.J. 180 (1977).]

In this case, it is undisputed that Forsgate farmed the subject property and qualified for farmland assessment prior to NJTA's partial taking. Despite Forsgate's intent to build a hotel on the property, but for NJTA's taking, the property would have continued to be farmed and would qualify for farmland assessment. The event changing the farmland status of the property, therefore, was the taking by NJTA. Although Forsgate may have intended to change the use at a later time, "intended future use is not the test . . . the sole criterion is the actual use of the land." Rossi v. Upper Pittsgrove Twp., 12 N.J. Tax 235, 241 (Tax 1992). In addition, NJTA's claim that it is a State agency and is thus immune from payment of the rollback taxes except from the condemnation award is inaccurate. We have held, ". . . [where] no change of use was made by the seller but the land was in effect taken out of circulation by the action of the State [] [t]he logical result is that the State must bear all roll-back taxes." Gardiner, supra, 196 N.J. Super. at 533.

The condemning authority in this case chose to condemn farmland for its own use. Consequently, under controlling case law, "[i]t must bear the cost of such condemnation including tax obligations that are imposed as a matter of law." Bd. of Educ. of S. Brunswick v. Eckert, 361 N.J. Super. 238, 247 (App. Div.), certif. denied, 178 N.J. 28 (2003). Moreover, we note NJTA's prior acknowledgment of its responsibility to pay roll-back taxes for the acquisition and therefore reject its claim that compensation must be made from the condemnation award.*fn11

Accordingly, we affirm.

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