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Elizabeth Board of Education v. City of Elizabeth

September 28, 2007; as amended October 5, 2007

ELIZABETH BOARD OF EDUCATION, PLAINTIFF-APPELLANT,
v.
THE CITY OF ELIZABETH, J. CHRISTIAN BOLLWAGE, MAYOR, THE CITY COUNCIL OF ELIZABETH, TRUMBULL STREET BUSINESS CENTER, L.L.C., LUIS RODRIGUEZ, AND VIVIAN RODRIGUEZ, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Union County, UNN-L-0435-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 10, 2007

Before Judges Weissbard, S.L. Reisner and Gilroy.

Plaintiff Elizabeth Board of Education (the Board) appeals from a summary judgment dismissing its complaint in lieu of prerogative writs against defendants City of Elizabeth (the City), the City's Mayor, J. Christian Bollwage, the City Council (Council), Trumbull Street Business Center, L.L.C., (TSBC), Luis Rodriguez and Vivian Rodriguez (jointly Rodriguez). We affirm.

I.

Elizabeth High School was constructed in 1977. In April 2006, the school's student enrollment was 5300, the highest of any high school in New Jersey, in a building designed to hold approximately 3000 students. In order to solve the congestion in the high school, the Board decided to build a separate vocational-technical school for the 900 students enrolled in those programs. By 1998, the Board was working to identify a suitable location for this new vocational-technical high school.

On July 28, 1998, the Council passed a resolution authorizing the City's Planning Board to investigate "if the area adjacent to the Kapkowski Road Redevelopment area is an area in need of redevelopment, and, if so, further authorize[d] the development of such a redevelopment plan." By the middle of 1999, the Board determined that this same property owned by New Jersey Transit (NJT), was an ideal location for the proposed new school. Accordingly, the Board sought to obtain the land pursuant to its power of condemnation, N.J.S.A. 18A:20-2. Following NJT's successful challenge to the condemnation attempt, the Board appealed.

On September 21, 2000, while the Board's appeal was pending, the City's Planning Board passed a resolution "designate[ing] . . . the Marine Waterfront - Trumbull Street Redevelopment Area . . . as a 'redevelopment area'" and recommended that the Council also designate the area as such. On December 7, 2000, the Council resolved to adopt the redevelopment plan recommended by the Planning Board.

Thereafter, the City published a Request for Proposals of the redevelopment of the area. These proposals were due to the City's Director of Neighborhood Services on February 5, 2001. On January 23, 2001, the Council passed Ordinance No. 3285, "An Ordinance To Approve And Adopt The Trumbull Street Redevelopment Plan Pursuant To The Planning Board Recommendation."

When the February 5, 2001 proposal due date arrived, only one proposal had been submitted. The lone proposal was submitted by VILU Construction, Inc. (VILU) of Elizabeth, the principals of which were defendants Luis and Vivian Rodriguez.

The proposal provided for the building of "a state-of-the-art, . . . light industrial business complex at 801-871 Livingston Street."

On May 25, 2001, we published our decision in the Board's condemnation suit, Elizabeth Board of Education v. New Jersey Transit Corp., 342 N.J. Super. 262 (App. Div. 2001). First, we quoted the New Jersey Public Transportation Act of 1979 in identifying NJT as "an instrumentality of the State exercising public and essential governmental functions." N.J.S.A. 27:25-4. We then ruled that despite the Board's desire to obtain the land for an educational purpose, "there is no express, or necessarily implied, statutory authority which permits a board of education to condemn land owned by the State." Id. at 264. As in the instant case, the Board argued there was a "'compelling' need" for its requested relief "in light of Abbott [V]"*fn1 Id. at 270.

We responded, however, that such an "argument must be directed to the Legislature, not to the courts." Ibid.

On September 25, 2001, the Council passed a resolution designating VILU "as the redeveloper for the Trumbull Street Redevelopment Project." On the same day, the Council passed Ordinance No. 3336, "An Ordinance To Authorize The Acquisition Of 801-871 Livingston Street, Elizabeth, New Jersey, Lot 1123, Block 8, From New Jersey Transit Corporation, At A Purchase Price Of $1,095,000.00, Less A Credit Of $575,000 For Environmental Cleanup, For A Net Amount Of $520,000." This area was "located within the Trumbull Street Redevelopment Area" that VILU was to redevelop. On September 27, 2001, Mayor Bollwage signed this ordinance.

On December 4, 2001, the City entered into a sale contract with NJT for the purchase of the property at 801-871 Livingston Street. This contract provided for the $575,000 credit for environmental cleanup, resulting in a sale price of $520,000.

Meanwhile, the Board began to search for alternate properties. In the summer of 2002, it investigated "the Johnson Machinery site" but abandoned its hopes for this location in March 2003 after due diligence revealed physical conditions rendering it unsuitable for use as a school.

In June 2003, the Board focused on "the ELG Metals site." Despite the Board's claims that it pursued this site "with the knowledge and approval of the City and Mayor Bollwage," the Board allegedly learned months later, after beginning due diligence, "that Mayor Bollwage had decided not to permit a school to be built there."

In August 2004, the Mayor allegedly "agreed to change the vocational high school site to 1000 Jefferson Avenue" and the Board "expended significant time and money to investigate whether this site would be appropriate." Less than a year later, by May 2005, the City notified the Board that only a pre-kindergarten through eighth grade school, and not a high school, could be built at that site.

After dismissing another site as unsafe because of "[t]he necessity for environmental remediation" there, the Board determined that only the NJT property it formerly sought, and an adjacent lot, known as "the Gunite site," would be suitable for the new high school.*fn2 Thus, in October 2005, the Board identified these two locations as its desired site for the vocational-technical high school and a new physical education complex.

The Board claims that "[a]t all times prior to the institution of this lawsuit the City has refused to entertain negotiations with the [Board] to sell the [NJT] site." Despite alleged statements by the Mayor that the City would identify appropriate locations for the new school, the Board claimed that as of its April 27, 2006, Statement of Material Facts, it had "not received any communications on this issue" nor had anyone at the State's Department of Education been contacted by a representative of the City.

On June 3, 2005, Pablo Muñoz, the Acting Superintendent of Schools sent a letter on behalf of the Board to John F. Spencer, Chief Executive Officer of the New Jersey Schools Construction Corporation (the SCC). This letter listed the Board's planned priorities, as developed by its School Properties Committee at a June 1, 2005, meeting. Listed as the eighth item among this list of fifteen was "New Vocational High School." Later in the letter, Muñoz reminded Spencer that "[a]s you are aware, the district needs all the facilities on the above list. We believe that restrictions on the number and types of projects -- or limiting construction and renovation to priority projects -- in the district is inconsistent with the Supreme Court's mandates . . . ."

The Board claims that Muñoz met with the Mayor on December 8, 2005. The Board asserts that at this meeting, Muñoz expressed the Board's willingness to build the school in an alternate location if the Mayor would "help to identify a suitable location" and that the Mayor agreed "to look for land and said that a particular parcel of land might soon be available." Four days later, on December 12, 2005, the Mayor allegedly called Muñoz and rescinded his offer to help find a new school location.

On December 13, 2005, the Council passed a resolution to amend its September 25, 2001, resolution and "change the name of the Redeveloper from Vilu [sic] Construction to Trumbull Street Business Center, LLC." Defendants Luis and Vivian Rodriguez were the principals of defendant TSBC, as well as VILU.

On December 27, 2005, the Council passed Ordinance No. 3774, "An Ordinance To Authorize The Sale Of City Owned Property Located At 801-871 Livingston Street, Tax Account No. 8-1123, To Trumbull Street Business Center, LLC. [sic], For Redevelopment At A Purchase Price Of $520,000." The ordinance was approved by the Mayor on December 28, 2005.

On January 11, 2006, ARD Appraisal Company completed an Appraisal Report of 801-871 Livingston Street for the Board. ARD appraised the market value of the property "as is" at $5,125,000, as of the date it was issued. ARD's valuation did not include any potential environmental clean-up costs, which could have substantially decreased the estimated market value and might delay the sale of the property.

On January 31, 2006, the Board filed an order to show cause and verified complaint in lieu of prerogative writs to contest Ordinance No. 3774. Before discussing the litigation in more detail, we pause to outline the subsequent history of the planned development of the disputed land.

On February 17, 2006, some two weeks after the Board filed its complaint, the attorney for TSBC and Rodriguez, wrote to the City's attorney, stating that though his "client has expended considerable sums of money and devoted substantial time and effort to achieve a redevelopment of the property with a use that would be highly beneficial to the citizens of Elizabeth," because of the Board's suit, TSBC would "not contest the determination of the City to rescind its designation as the Redeveloper of the entire site and the determination to rescind the authorization to sell the former New Jersey Transit property to it."

On February 28, 2006, the Council passed a resolution rescinding its resolutions of September 25, 2001, and December 13, 2005, designating VILU and TSBC as redevelopers for the disputed land. On March 14, 2006, the Council passed Ordinance No. 3801, "An Ordinance To Rescind Ordinance No. 3774 Of The City Of Elizabeth, Adopted December 27, 2005 . . . ." The ordinance rescinded the sale of the property to TSBC ...


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