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In re Application of the New Jersey Sports and Exposition Authority Made Pursuant to the "Off-Track and Account Wagering Act"

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


May 12, 2008

IN THE MATTER OF THE APPLICATION OF THE NEW JERSEY SPORTS AND EXPOSITION AUTHORITY MADE PURSUANT TO THE "OFF-TRACK AND ACCOUNT WAGERING ACT" (N.J.S.A. 5:5-127 ET. SEQ.) AND THE RULES OF THE NEW JERSEY RACING COMMISSION, FOR THE ISSUANCE TO THE AUTHORITY OF AN OFF-TRACK WAGERING LICENSE, 1071 HIGHWAY NO. 37 WEST, TOMS RIVER, NEW JERSEY.

On appeal from a Final Determination and Order of the New Jersey Racing Commission.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 8, 2007

Before Judges Payne and Sapp-Peterson.

In these appeals, argued back-to-back and decided in this single decision, appellants, Township of Berkeley and Robert K. Haelig, Jr., a resident of Ortley Beach, appeal from the issuance of a license by the New Jersey Racing Commission (NJRC) to the New Jersey Sports & Exposition Authority (NJSEA) to site an off-track betting facility on highway-business zoned property, formerly occupied by a Grand Union grocery store, located in Toms River (formerly, Dover Township),*fn1 adjacent to an age-restricted housing development in Berkeley Township.

On appeal, Berkeley Township raises the following arguments:

POINT I.

THE OFF-TRACK AND ACCOUNT WAGERING ACT CONFLICTS WITH THE OPEN PUBLIC MEETINGS ACT, N.J.S.A. 10:4-6, ET SEQ.

POINT II.

THE OFF-TRACK AND ACCOUNT WAGERING ACT, N.J.S.A. 5:5-127, ET SEQ. IS UNCONSTITUTIONAL SPECIAL LEGISLATION.

POINT III.

THE NEW JERSEY OFF-TRACK AND ACCOUNT WAGERING ACT DOES NOT PERMIT A SIMPLIFIED REVIEW BEFORE THE LOCAL PLANNING BOARD TO THE AUTHORITY OR FREEHOLD RACEWAY.

The following arguments are made by appellant Haelig:

POINT I.

THE FINAL ORDER AND DETERMINATION OF THE NEW JERSEY RACING COMMISSION ISSUING THE OFF-TRACK WAGERING LICENSE TO FREEHOLD[] RACEWAY OTB, L.L.C. SHOULD BE VACATED ON GROUNDS THAT IT WAS IRREPARABLY TAINTED AND CORRUPTED BY CONFLICTS-OF-INTEREST FROM THE INCEPTION OF THE APPLICATION PROCESS. (NOT PRESENTED BELOW)

POINT II.

APPELLANT ROBERT K. HAELIG, JR. ADOPTS AND INCORPORATES BY REFERENCE, THE ARGUMENTS ADVANCED BY CO-APPELLANT, TOWNSHIP OF BERKELEY.*fn2

We affirm.

I.

The facts of this matter are relatively straight-forward. On May 22, 2006, the NJSEA filed an application with respondent NJRC, pursuant to the Off-Track and Account Wagering Act, N.J.S.A. 5:5-127 to -160, to obtain a license to site an off-track wagering facility at 1071 Highway 37 West, Toms River, New Jersey. See N.J.S.A. 5:5-130. Notice of the application was provided, pursuant to N.J.S.A. 5:5-131h, only to Toms River where the facility was proposed to be located. Toms River took no action to disapprove of the application within the forty-five-day period for such action provided by the Act. Ibid.

On August 16, 2006, pursuant to advance public notice, carried in newspapers circulating within Ocean County, the NJRC conducted a public hearing on the application in Toms River, pursuant to N.J.S.A. 5:5-132. A number of citizens, including Haelig, appeared in opposition to the application. There was no official appearance on behalf of Berkeley Township.

On September 6, 2006, the Toms River Planning Board conducted a capital project review, pursuant to N.J.S.A. 40:55D-31, as required by N.J.S.A. 5:5-131h(2). In a letter dated September 8, 2006, the Planning Board set forth its concerns with respect to security, buffering, signs, traffic control devices, parking and parking lot lighting. The concerns were addressed by Freehold Raceway in a letter dated September 12, 2006.

In a letter to the NJRC, dated August 31, 2006, Berkeley Township counsel, Patrick Sheehan, requested that a second public hearing be conducted in Berkeley Township, expressed concern regarding the location and purpose of the proposed facility, and notified the NJRC of the Berkeley Township Council's resolution opposing the facility's construction. The NJRC determined not to hold the requested second hearing, but at its meeting on September 26, 2006, it decided to allow further written comment on the NJSEA's application until October 6, 2006.*fn3 A further comment from Berkeley Township's counsel was received at the conclusion of this period.

On November 15, 2006, the NJRC approved the NJSEA's application for a license and for authorization to immediately transfer the license to respondent Freehold Raceway Off-Track, LLC, and on December 11, 2006, the agency's decision was deemed approved by the Attorney General. See N.J.S.A. 5:5-133a and b.

These appeals followed. Applications to stay the decision of the NJRC were denied by the Attorney General upon the recommendation of the NJRC, and by us.

II.

In describing the Off-Track and Account Wagering Act, the Senate Economic Growth, Agriculture and Tourism Committee stated:

As amended by the committee, this bill authorizes the establishment of an off-track wagering system in this State consisting of one or more off-track wagering facilities at which parimutuel wagering will be conducted on simulcast horse races. A maximum of 15 licensed off-track wagering facilities would be permitted (not more than eight during the first two years after the legislation's effective date). In addition, the bill authorizes the establishment of an account wagering system through which persons may wager on horse races by phone or other electronic means. . . . [Senate Economic Growth, Agriculture and Tourism Committee Statement, Assembly, No. 3315 - L.2001, c. 199.]

The Committee Statement also noted that the Act authorized the NJRC to issue licenses to the NJSEA to permit off-track wagering at specified off-track wagering facilities, but required as part of the licensing process that the NJSEA hold a permit to conduct a specified number of standardbred and thoroughbred races within the State. It then continued by stating:

In addition, the NJSEA must demonstrate that it has entered into a contract, called a "participation agreement", with all other entities that held a permit to conduct a horse race meeting in this State in calendar year 2000, have complied with the terms of the permit, and are in good standing with the commission and the State. It is envisioned that through the participation agreement, the permit holders will come to a consensus on a variety of issues, including various aspects of the off-track wagering facility itself and how certain profits generated from the facility will be divided among the permit holders. Through the participation agreement, it is anticipated that the permit holders will work together to establish a State-wide collective-style off-track wagering system.

The bill grants the [New Jersey Racing] commission oversight of the entire licensing process, including many aspects of the off-track wagering facility itself, such as site plans and the location of the facility and the amenities to be offered at the facility. The bill provides that a municipality will have veto power over the NJSEA's decision to site an off-track wagering facility in that municipality. Even if the municipality does not veto the facility, the NJSEA may not site the facility in an area zoned residential, must submit its plans to the municipal planning board and must make reasonable efforts to address the reasonable concerns of the planning board. [Ibid.]

As the Committee Statement indicated, N.J.S.A. 5:5-131h provides, in part:

The authority, in lieu of obtaining municipal zoning and planning approvals that may otherwise be required in connection with the off-track wagering facility, shall submit a written notice of its intention to site an off-track wagering facility to the governing body of the municipality within which the facility would be sited. . . .

Within 45 days of its receipt of the authority's notice of intention, the municipal governing body may disapprove of the proposed site of an off-track wagering facility by adopting a resolution which shall be valid and binding upon the authority and the commission upon delivery of a duly certified copy of the resolution to the authority and the commission.

Whenever a municipality determines to consider a resolution disapproving a proposed off-track wagering facility, the authority shall be given an opportunity to offer a public presentation of the proposed facility prior to consideration of the resolution. A resolution disapproving a proposed off-track wagering facility shall state the reasons for disapproval.

Appellants argue that this provision of the Off-Track and Account Wagering Act, which permits municipal approval of an application through inaction, and only requires a hearing when disapproval is contemplated, conflicts with the Open Public Meetings Act, N.J.S.A. 10:4-6 to -21. Thus, they claim that the provision at issue should be invalidated. We disagree.

Appellants have not offered any precedent that would establish our power to invalidate a later-passed statute, simply because its terms do not fully coincide with the intent of an earlier enactment, and we are unaware of any such precedent. Further, we find no conflict between the two Acts. Because the Off-Track and Account Wagering Act permits approval by default, the necessity of a meeting, as defined by the Open Public Meetings Act in N.J.S.A. 10:4-8(b), triggering the application of that Act, does not exist. And finally, if appellants sought to challenge the procedures utilized in this case on Open Public Meetings Act grounds, the proper method of doing so would have been through an action in lieu of prerogative writs, filed within forty-five days of becoming aware of the alleged violation of the Act by Toms River. See N.J.S.A. 10:4-15(a). No such challenge was filed in this case.

III.

Appellants also argue that the Off-Track and Account Wagering Act constitutes unconstitutional special legislation. See New Jersey Const., art. IV, § 7, ¶ 7 and ¶ 9(8). In this regard, they note that N.J.S.A. 5:5-130 requires the NJSEA, the entity to which a off-track wagering license is initially issued, to enter[] into a participation agreement with each and every other person, partnership, association, corporation, or authority or the successor in interest to such person, partnership, association, corporation or authority that:

(1) held a valid permit to hold or conduct a race horse meeting within this State in the calendar year 2000;

(2) has complied with the terms of such permit; and

(3) is in good standing with the commission and the State of New Jersey.

Once a license is issued, the NJSEA is empowered by N.J.S.A. 5:5-133b, if it has the approval of the NJRC to do so, to assign an off-track wagering license to a "permit holder," defined by N.J.S.A. 5:5-129 as a "holder of an annual permit to conduct a horse race meeting issued by the commission," provided that the NJSEA retains responsibility for license renewals. "With the approval of the commission, the off-track wagering licensee may enter into a contract or agreement with a person or entity to conduct or operate an off-track wagering facility for the licensee and to act as the agent of the licensee in all off-track wagering matters approved by the commission." N.J.S.A. 5:5-133b.

Appellants claim these aspects of the Act, which restrict the entities with which the NJSEA must enter into participation agreements and to which the NJSEA may assign off-track wagering licenses that it has received, constitutes special legislation, because only the NJSEA and the Freehold Raceway qualify to hold off-track wagering facility licenses, and because Atlantic City casinos and out-of-state entities are excluded from the Act's benefits.

Appellants do not effectively rebut the position of the Vice-President of the NJSEA that the Authority has, in fact, "entered into a participatory agreement with all permit holders, and that of the 15 off-track wagering facilities authorized by the Act, it is anticipated that two will be assigned to the Atlantic City Racetrack, four will be assigned to Freehold Raceway, and the remaining nine will be retained by the Authority itself."

Additionally, and despite our request for supplemental briefing on the issue, neither appellant has demonstrated standing to assert the rights of the allegedly excluded third-party entities in connection with this constitutionally-based challenge. Although New Jersey's standing rules are more liberal than those of the federal courts, to obtain standing to assert a constitutional claim in this State, appellants nonetheless must demonstrate "a sufficient stake and real adverseness." Crescent Pk. Tenants Assoc. v. Realty Eq. Corp. of N.Y., 48 N.J. 98, 107 (1971); see also N.J. Chamb. of Commerce v. N.J. Elec. Law Enforce. Comm., 82 N.J. 57, 67 (1980). Here, neither appellant occupies a role that is similar to the allegedly excluded entities, and neither will be damaged by the exclusion of those entities from the Act's purview. Thus a showing of the required stake and adverseness is absent. Nor has either appellant expressed a strong public interest that, when coupled with a "slight private interest" (if proven) could provide grounds for standing, or any other ground for recognition of standing, despite traditional rules to the contrary. Id. at 68-69. Accordingly, we decline to address appellants' constitutional argument.

IV.

N.J.S.A. 5:5-131h provides that if a municipality does not adopt a resolution disapproving the proposed site of an off-track wagering facility, the NJRC may grant the NJSEA a license to operate at that site, provided:

(1) the proposed off-track wagering facility site is not in an area zoned residential;

(2) the authority has submitted its plans to the municipal planning board, and complied with the provisions of [N.J.S.A. 40:55D-31]; and

(3) the authority has made reasonable efforts to address the reasonable concerns expressed by the municipal planning board.

Appellants claim first that the proposed off-track wagering facility site fails to meet the Act's criteria because it is located in an area that is contiguous to a residential zone. However, the location of the site itself is not within the residential zone, but rather, in a highway business zone. That nearby property may be residentially zoned does not result in a violation of the Act.

Additionally, appellants claim that because the facility, as proposed, will contain a bar, restaurant, theaters for viewing simulcast racing, and an event room, plans for its construction require more than the simplified plan review authorized by N.J.S.A. 5:5-131h and 40:55D-31. These arguments were previously raised by Berkeley Township in a separate prerogative writ action against Freehold Raceway, the Dover Township Planning Board and the NJSEA, in which the Township alleged in its amended complaint that "[t]he Authority and Freehold Raceway Off-Track, LLC, should have applied for formal site plan review of the proposed facility" and the "Planning Board[] should have conducted formal site plan review . . . because the Off-Track and Account Wagering Act does not pre-empt local planning approval for bars, restaurants, theaters and event rooms," and does not authorize simplified site plan review of such features pursuant to N.J.S.A. 40:55D-31. In its amended complaint, Berkeley Township also alleged, as here, that the residential zoning of adjoining property precluded siting of the facility as proposed.

Summary judgment was granted to defendants in Berkeley Township's prerogative writ action, and that judgment was not appealed. As a consequence, the Township is collaterally estopped from raising the identical issues in the present matter. Brookshire Equities, LLC v. Montaquiza, 346 N.J. Super. 310, 319-20 (App. Div.) (citing In re Estate of Dawson, 136 N.J. 1, 20 (1994)), certif. denied, 172 N.J. 179 (2002).

In any event, our review of the Act satisfies us that, not only is the zoning of an adjacent municipality irrelevant to the siting issue, but also that the Legislature intended that the off-track wagering facilities include the features noted by appellants, and that despite their presence, site plan review would be limited, as set forth in N.J.S.A. 5:5-131h, to that specified in N.J.S.A. 40:55D-31. See N.J.S.A. 5:5-128c (stating that "[]t is the further intent of the Legislature that facilities offering off-track wagering opportunities to the public also offer other amenities such as quality dining and handicapping facilities"); see also N.J.A.C. 13:74-6.1(a) (requiring that "[a]n off-track wagering licensee shall establish and maintain an off-track wagering facility of sufficient square footage to promote . . . [v]iewing of simulcast horse races by patrons in a comfortable manner, which is not obtrusive to the additional amenities within the off-track wagering facility [and] [d]ining and handicapping facilities as contemplated by the Act according to specifications approved by the Commission").

Although the simplified plan review provisions of N.J.S.A. 40:55D-31 apply primarily to facilities that perform a governmental function, and the Off-Track and Account Wagering Act specifies that "[i]n establishing off-track wagering facilities, the authority will not be performing an essential government function but rather an essentially private business function," N.J.S.A. 5:5-128(e), simplified plan review is nonetheless specified by the Act. N.J.S.A. 5:5-131h(2). Accordingly, any argument by appellants regarding the inapplicability of simplified plan review that is based upon the private nature of the function fails.

V.

In an argument raised only by appellant Haelig, he claims that the final order approving the issuance of a license to the NJSEA and permitting its transfer to Freehold Raceway should be vacated because of alleged conflicts of interest inherent in the application process. Haelig asserts, for the first time on appeal, that the issuance of the license was tainted and corrupted through conflicts of Ocean County Republican Boss and gambling interest attorney, George Gilmore, Esq.; Lawyer-Councilman and Dover Township Council President Gregory McGuckin, the law partner of Gilmore's party finance chairman; and the conflicts of elected Dover Township Mayor and Council members (two of whom are lawyers), appointed Township officials, and elected and appointed school board officials of both political parties.

In support of this claim, Haelig makes a series of ten accusations in the preliminary statement prefacing his brief:

(1) that Glimore's representation of Freehold Raceway "and other gambling interests" conflicted with his positions as Ocean County Republican Chairman, Chair of the Ocean County Board of Elections, and attorney for the Toms River Regional School District, but he did not make the conflict known during the forty-five day "review period prescribed in the legislation for public consideration of the [siting] application"; (2) that McGuckin did not make the application public to his client, South Toms River, despite its interest as a part of the Toms River regional school system; (3) that more than one year before the application was filed, McGuckin and others traveled to Philadelphia as "guests" of Gilmore and Freehold Raceway to view one of the company's off-track wagering facilities in that State; (4) that the Toms River Council, including McGuckin, issued a liquor license to "an entity connected with" Freehold Raceway at a bid price that was allegedly less than its actual value; (5) that the Council conspired to keep the siting application secret during the "statutory 45 day period of review"; (6) that the Mayor and Council never discussed the application in public; (7) that the application was not made public "by anybody until after the 45 day review period had lapsed"; (8) that the Toms River Planning Board did not conduct a comprehensive site plan review; (9) that Berkeley Township's government was not advised of the application during the "review period; and (10) that, despite the location of five high schools "within short driving distance" of the proposed site, no local government or school board was advised of the application during the "review period." In this connection, Haelig claims that, once school students reach the age of eighteen, they will be exposed to "the potential risks to young people for gambling, alcohol*fn4 and motor vehicle tragedies."

In his legal argument, Haelig claims:

Mr. Gilmore, the attorney for both the public entity, the Toms River Schools, and the private applicant, Freehold, Raceway OTB, L.L.C., acted to serve his private client at the expense of the public entity.

Further, Mr. McGuckin, abrogated both his public responsibility as an elected official to make the OTB application public, and his responsibility to his public client to make the existence of the application known to the Borough of South Toms River. It is most doubtful that their participation to the benefit of the applicant "can be proper in any case".

In large measure, Haelig's claim that the license issuance was invalid in this case centers around an alleged lack of notice to purportedly interested persons and entities of the proposed site application. However, this challenge should have been presented to the trial court through an action in lieu of prerogative writs pursuant to Rule 4:69. In its absence, a proper record is unavailable, and we therefore decline to address the notice issue. As previously noted, in light of the provisions of N.J.S.A. 5:5-131h(2), we find no merit in Haelig's contention that the Toms River Planning Board should have conducted a full site plan review. We also reject Haelig's claim of impropriety in the award of a liquor license to New Jersey Accounts Wagering LLC, because Haelig has offered no proof to counter the claims of Freehold Raceway that the license was awarded in a closed-bid proceeding and that the cost of the license was believed to be the highest amount ever paid in Toms River. Moreover, Haelig has offered no proof that the amount received for the license was inadequate.

As a final matter, we reject Haelig's various claims of conflict of interest, which properly should have been raised through a complaint pursuant to the Local Government Ethics Law, N.J.S.A. 40A:9-22.1 to -22.25, so that a record suitable for our review could have been created.

Affirmed.


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