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Township of Readington v. Solberg Aviation Co.

August 19, 2009

TOWNSHIP OF READINGTON, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
SOLBERG AVIATION CO., A NEW JERSEY PARTNERSHIP, DEFENDANT-APPELLANT, AND JOHN HROMOHO; THOR SOLBERG, JR.; WATERS MCPHERSON MCNEILL, P.C.; FOX, ROTHSCHILD, O'BRIEN & FRANKEL, LLP; THOR SOLBERG AVIATION; NEW JERSEY DEPARTMENT OF THE TREASURY, DIVISION OF TAXATION; AND TOWNSHIP OF READINGTON, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Hunterdon County, Docket No. L-468-06.

The opinion of the court was delivered by: Carchman, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued April 27, 2009

Before Judges Carchman, Sabatino and Simonelli.

This appeal challenging a condemnation judgment granting, among other things, title and possession of a portion of defendant Solberg Aviation Co.'s ("defendant" or "Solberg") property to plaintiff Township of Readington ("plaintiff" or "the Township"), raises two critical issues of law. The first is the preemptive effect of state aviation statutes, specifically the Air Safety and Zoning Act (ASZA), N.J.S.A. 6:1-80 to -89, and the State Aviation Act, N.J.S.A. 6:1-20 to -44, and regulations on land use authority. The second is the application of the principles enunciated in Mount Laurel Twp. v. MiPro Homes, L.L.C., 379 N.J. Super. 358 (App. Div. 2005), aff'd, 188 N.J. 531 (2006), cert. denied, ___ U.S. ___, 128 S.Ct. 46, 169 L.Ed. 2d 242 (2007). Defendant claims the taking was pretextual in an attempt to limit the use of airport property. As to this claim, we conclude that defendant presented a sufficient factual basis to overcome a motion for summary judgment; we further conclude that state statutes preempt certain aspects of local land use, constraining a municipality's exercise of its condemnation authority, Garden State Farms, Inc. v. Bay, 77 N.J. 439, 449 (1978). In a consolidated appeal, we further conclude that under the Eminent Domain Act of 1971 (EDA), N.J.S.A. 20:3-1 to -50, title passed to the Township upon the filing of the Declaration of Taking, and the Township improperly assessed taxes against defendant.

I.

A.

We provide an expansive discussion of both the factual and procedural history of this dispute. Solberg is the owner in fee simple of approximately 726 acres of land in the Township of Readington, Hunterdon County. The property, which is comprised of four contiguous tracts separated by public roads, contains a small airport, farmland, open fields, woodlands, wetlands and stream corridors. Approximately ninety-two percent of the property is farmland assessed. The airport facilities occupy between seventy and 102 acres.*fn1

Solberg-Hunterdon Airport (SHA) is a general aviation facility that serves business and recreational users. In 1990, the Federal Aviation Administration (FAA) and the New Jersey Department of Transportation, Division of Aeronautics (NJDOT) designated SHA as a "reliever airport" because of its potential to reduce congestion at Newark Liberty International Airport. In 2000, the National Air Transportation Association named SHA as one of "America's 100 Most Needed Airports."

SHA has one 3,735-foot runway, of which only the first 3,000 feet are paved. It also has several unpaved runways and taxiways, a two-story terminal building, two hangars, numerous airplane parking spaces, a paved automobile parking lot, underground fuel tanks, and a VORTAC*fn2 navigational aid. Aircrafts that operate at SHA include single and light twin engine piston, turboprop and jet aircraft, gliders, and helicopters. The airport is well known for hosting the Annual New Jersey Hot Air Balloon Festival.

On July 11, 2006, the Township Committee adopted Ordinance 25-2006, authorizing acquisition of defendants' property. The ordinance provided that the Township has determined that the public interest will be served by acquisition of the entirety of the Property for public use and purposes, including, without limitation, open space and farmland preservation; land for recreational uses, conservation of natural resources, wetlands protection, water quality protection, preservation of critical wildlife habitat, historic preservation, airport preservation, and preservation of community character. . . .

The ordinance authorized the Township to acquire, through condemnation, a fee simple title to the portion of defendants' property lying outside of the 102-acre airport facilities area. It further authorized the Township to acquire, through condemnation, development rights to the airport facilities area itself. Ordinance 25-2006 reflected the end result of a lengthy and often contentious relationship between the airport and the Township.

In 1939, Thor Solberg, Sr., opened SHA. On February 3, 1941, the Township Committee passed a resolution granting permission for the operation of a commercial airport on the property. Tensions soon arose, however, between the airport and local residents.

In 1967, Governor Richard J. Hughes announced plans to recommend SHA as the site for a fourth metropolitan jetport. In response "[P]olitical, business and community leaders . . . gather[ed] forces . . . to battle the jetport. . . ." As a result of public pressure, plans to expand the airport to accommodate jets were abandoned.

In 1983, the New Jersey Legislature enacted the ASZA, which authorized the Commissioner of Transportation to adopt rules and regulations to specify permitted and prohibited land uses within airport safety zones. N.J.S.A. 6:1-85 required each municipality that contained any part of an airport safety zone to enact an ordinance incorporating the standards promulgated by the Commissioner. The Township strongly opposed the ASZA, believing that it removed decisions concerning airport expansion from the hands of local officials. It twice petitioned NJDOT for an exemption from the requirements of the ASZA, but its requests were denied. Despite its legal obligation to do so, and repeated prodding from NJDOT, it failed to pass an ordinance that conformed with N.J.S.A. 6:1-85. Rather, it pursued lobbying efforts to have the ASZA repealed and legal efforts to have the ASZA declared unconstitutional. When amendments to the ASZA were proposed in 2000, the Township Committee and numerous local residents submitted petitions asking Governor Christine Todd Whitman to veto the bills.

In the late 1980s, it appeared that Linden Airport might close. A feasibility study prepared by a committee consisting of representatives of the FAA, NJDOT and local officials identified SHA as a potential replacement site. The Mayor of Readington wrote a series of letters that expressed his strong objections to the position taken by the FAA. Despite the Township's opposition, the Solbergs wrote to the Mayor of Linden on May 30, 1990, confirming their willingness to accept the transfer of aircrafts from Linden Airport. Newspaper articles published at this time reported comments from the Mayor concerning the Township's "fallback option" of condemning the Solberg property.

During an August 1990 meeting between Township officials Ron Monaco and Steve Mirota, Township attorney William Savo, and Thor Solberg, the following recorded exchange took place:

[Solberg]: [Y]ou're taking away my livelihood.

[Monaco]: No, we're not.

[Mirota]: Not necessarily.

[Solberg]: You know that's what -- you want to take the land.

[Monaco]: We haven't done that yet.

[Solberg]: It's our land.

[Savo]: Let me tell you what our options are. We could go down ther[e] tomorrow, right? And [take] just enough to put the airport out of business. I wouldn't say anything.

Although the plan to close Linden Airport ultimately fell through, tensions between the Solbergs and the Township persisted throughout the 1990s. In September 1990, the Solbergs requested funding from the FAA for expansion. Shortly thereafter, the main airport runway was extended from 1,800 feet to 3,000 feet. In 1995, the Township Board of Education decided to site a new elementary school immediately adjacent to the airport. This decision drew sharp criticism from NJDOT, which warned that it would not be prudent to locate a school there. Between 1996 and 1999, the Township committee adopted at least five resolutions opposing any increase in SHA's runway length. Members of the Township Committee encouraged local residents to sign petitions and write legislators in opposition to airport expansion.

In 1997, Solberg released a Final Draft Master Plan and an Airport Layout Plan that provided detailed recommendations for airport development, estimated construction costs, and set forth a schedule of improvements over a twenty-year planning period. Among the recommended projects were a new 4,890-foot-long replacement runway, a full parallel taxiway, paving and extension of a crosswind runway, parking facility improvement, additional hangars, an automated weather observation station, a precision instrument approach and an approach lighting system.

In response, the Township Committee submitted a lengthy letter to the FAA, NJDOT and numerous government officials "to formally and strenuously object" to the Master Plan.

In March 1999, the FAA and NJDOT gave conditional approval to the Airport Layout Plan, pending the successful completion of an environmental assessment. In April 1999, the Mayor wrote to NJDOT to protest this decision and stated that the Township would "do everything in [its] power to maintain the status quo of [SHA]." At a Township Committee meeting in June 1999, the Deputy Mayor stated that it was "time to draw the line in the sand" and "do whatever it takes right now legally to make sure that [SHA] never becomes a jetport . . . ."

On February 1, 2001, Princeton Hydro, LLC, provided the Township with a "Soleburg [sic] Airport Environmental Assessment Scoping Report," which reviewed SHA's 1997 Master Plan and explained the specific areas that should be addressed by NJDOT's environmental assessment. This report formed the basis of a lengthy submission by the Township to NJDOT on February 9, 2001, that stated the Township's concerns over airport expansion.

In October 2002, NJDOT released a preliminary "Draft Environmental Assessment for Solberg-Hunterdon Airport" (EA). The options studied in the EA were substantially scaled back from the recommendations set forth in the airport's 1997 Master Plan. The EA discussed three possible alternatives to SHA's proposals: (1) the "no-build alternative," where the airfield would retain its current configuration and only rehabilitation of the existing facilities would be allowed; (2) the "modified no-build alternative," which would allow minimum improvements to the facilities without lengthening any of the airport runways; and (3) the "runway improvement alternative," where a 3,735-foot-long replacement runway would be constructed on another portion of the airfield and the current runway would be converted into a parallel taxiway. The EA noted that the no-build alternative was inadequate from the perspective of the FAA and NJDOT because the existing runway configuration did not meet FAA airport design standards. After discussing the environmental consequences of expansion, the EA summarized the potential impacts of the three alternatives. It concluded that the no-build alternative would have no environmental impacts, the modified no-build alternative would have minimal or indirect impacts and the runway improvement alternative would have slightly more impacts than the modified no-build alternative.

While NJDOT's environmental assessment process was underway, the Township commissioned a study of the threatened and endangered species of grassland birds at SHA, an environmental inventory report on the Solberg property, and an evaluation of the Solberg property for municipal acquisition. On July 9, 2001, the Township amended its 1990 Master Plan to include "policies relating to critical habitat and the SolbergHunterdon Airport . . . ." The amendment "recommended that the most effective way to preserve and manage the unique environmental resources and open space on these [the Solberg] tracts be through acquisition by the Township." Notably, the 2001 amendment represented the first time that the Solberg property was specifically identified by the Township as environmentally valuable. The 1990 Master Plan did not list the Solberg property as a "critical environmental impact area." Likewise, the Readington Township Open Space Inventory and Recommendations for Preservation, dated October 23, 1995, failed to identify the Solberg property for future acquisition. The Solberg tract was not included in the list of Greenways properties set forth in the June 2001, Report of the Readington Township Open Space Committee. Although the Readington Township Environmental Resource Inventory, dated April 20, 2001, noted that NJDEP named SHA as a "Natural Heritage Priority Site," it did not identify the airport as being environmentally vulnerable, nor did it recommend its acquisition.

On April 11, 2002, Solberg entered into an agreement with NJDOT for the sale of SHA. The agreement set a base purchase price of $22,000,000, subject to negotiation, and contingent upon obtaining a financing commitment from the FAA. In May 2002, the Township wrote to the Governor's Office to protest the pending sale. It also held several meetings with NJDOT to obtain assurances that the State had no plans to expand the airport facilities, and it received such assurances in a letter from the Commissioner, dated October 29, 2002. The purchase agreement between NJDOT and the Solbergs eventually fell through, however, because the parties could not agree on a final purchase price.

On July 14, 2005, the Township received an appraisal report that estimated the value of the Solberg property at $15,219,700. On August 5, 2005, the Mayor sent a letter of general circulation to Township residents stating that the Township would assume the lead in efforts to acquire and preserve the airport. On September 1, 2005, the Township received a final report prepared by GRA, Inc. on the benefits of municipal ownership of the airport.

A public meeting of the Township Committee was held on January 17, 2006, to discuss the future of SHA. Mayor Gerard Shamey discussed the negotiations that had taken place between the Township and the Solbergs since August 2005, and stated that they had come to an impasse because Solberg "remains committed to lengthening the runways, widening the runways, increasing the thickness of the runways with a view towards attracting a corporate jet business environment and facility." Mayor Shamey went on to say that "[t]he most important thing to me and to this Committee, and I think all of us on the Committee, is to retain decision-making power over development of the site here in Readington." The Committee then heard a series of presentations from environmental, planning, aviation and acoustical experts who addressed the ecology of the airport site, noise pollution and technical aspects of airport operations. On January 27, 2006, the Mayor sent a letter to Township residents that summarized the presentations of January 17, and stated that the Township Committee was committed to limiting the size of the airport runway to 3,735 feet.

At a public meeting on February 6, 2006, the Committee rejected a suggestion from Suzanne Solberg Nagle that the matter be submitted to a professional mediator and introduced a $22 million bond ordinance to raise funds to acquire the airport property. In a letter to Township residents dated February 14, 2006, the Mayor stated:

Whatever solution is reached, it must preserve the Township's voice in what happens to the character of our community. Recent legal precedents in Florida and elsewhere make clear that once an airport reaches a certain scale, local residents, and in some cases even the airport owners, may have little say in what type of aircraft can use the facility.

At a public hearing on February 21, 2006, the Committee voted unanimously to approve a $22 million bond ordinance. In a February 27, 2006, letter to Township residents, the Mayor stated that the Committee would not submit the matter to a mediator because the question of expanding the runway is not a "split the difference issue." He emphasized that the Township would "not accept any compromise that would expand the runway to more than its current permitted length."

A referendum on the bond ordinance was the subject of a special municipal election on May 16, 2006. Prior to the election, the Township distributed informational materials, including a document titled "Frequently Asked Questions" (FAQ). The FAQ stated that the "Township's goal is to preserve the airport as a small recreational airport, and to protect 625 acres around the airport as open space." The FAQ explained that the Township would not manage the airport, but it "would own the rights to determine future development on airport lands." Local newspapers published editorials by Township officials that urged residents to vote in favor of the bond ordinance in order to stop the airport from becoming a jetport. The referendum passed with an affirmative vote of 55.6%. At the June 28, 2006 Township Committee meeting, the ordinance authorizing acquisition of the airport property was introduced, and as mentioned previously, this ordinance was adopted on July 11, 2006.

On July 17, 2006, the Committee authorized the execution of loan agreements with the New Jersey Environmental Infrastructure Trust (NJEIT) and the New Jersey Department of Environmental Protection (NJDEP) for purchase of the airport property, which was approved on September 12, 2006. The Township's condemnation complaint was filed immediately thereafter.

The complaint was filed against Solberg and others*fn3 demanding a declaration that the Township had duly exercised its authority to acquire defendants' property by eminent domain and an order appointing commissioners to fix the compensation required to be paid for the taking of the property. The complaint also sought a declaration that the property's owner is legally responsible for all reasonable and necessary environmental clean-up costs that may arise from remediation of the site and asked the court to withhold disbursement of monies deposited pending adjudication of the environmental issues.

On September 22, 2006, the motion judge signed an order to show cause, directing defendants to file answers or motions within ten days. The judge also ordered that the sum of $21,378,000, which was the Township's estimate of the fair market value of the property, be paid into the court's trust fund unit upon the filing of a declaration of taking. On October 4, 2006, the Township filed a Declaration of Taking and deposited the monies with the Clerk of the Superior Court.

Defendants moved for an order staying the eminent domain proceeding, vacating the order of September 22, 2006, and enjoining the Township from enforcing its declaration of taking, as well as thereafter filing an answer disputing the allegations in the verified complaint and raising numerous affirmative defenses. The answer also asserted a counterclaim against the Township and a third-party complaint against several Township officials that alleged official misconduct, a violation of 42 U.S.C. § 1983, and breach of fiduciary duty and sought relief in lieu of mandamus.

Also on October 20, 2006, Kevin J. Devine and Taxpayers Alliance of Readington filed a notice of motion to intervene in order to request that the court's September 22, 2006, order for payment into court be vacated.*fn4

The judge ordered additional discovery and ultimately, she stayed the condemnation complaint and the declaration of taking, allowed the monies deposited by the Township to remain with the court, ordered the Township to immediately vacate the property, ordered defendants not to make any improvements or convey the property, denied Devine's motion to intervene and appointed two special discovery masters to oversee the pretrial proceedings.

Defendants filed a motion for summary judgment, seeking an order declaring that the Township was without authority to condemn the airport property. The Township also filed a motion for summary judgment, seeking an order entering final judgment on its claims and appointing commissioners for the determination of just compensation.

During the course of the litigation, the parties produced numerous reports and certifications from experts in the fields of aviation, valuation, planning, and the environment.

Princeton Hydro, an environmental expert for the Township, described defendants' property and opined that the site's natural resources would be detrimentally impacted by further airport development. Professional Planner Michael F. Sullivan reviewed the characteristics of the Solberg property and concluded that municipal acquisition would result in "multiple and interrelated public benefits" such as preservation of open space, farmland, critical habitat, and community character, and the provision of recreational resources.

Conway Consulting, an airports and aviation consultant, opined that forecasts of future aviation activity in the SHA Master Plan were overly optimistic and that the airport was in poor physical condition. Richard Golaszewski, a transportation economics expert, noted that "small general aviation airports do not usually generate large profits" and observed that defendants might seek a greater return by selling the property for non-airport uses. Golaszewski opined that SHA could not continue to operate on a long-term basis in its current condition and that money from the taking would provide defendants with the monetary resources to upgrade the airport facilities.

Defendants' experts refuted these opinions. A report prepared by Amy S. Greene Environmental Consultants (ASGEC) stated that the natural characteristics of the Solberg property were virtually identical to those of the Township as a whole and that, in fact, the Solbergs had done a better job of conserving agricultural land use than had the Township. In a second report, ASGEC opined that [t]he grassland bird population at Solberg Airport is not in imminent danger of being eradicated by airport operations. It is the normal and regular general maintenance activities associated with airport operations that provides the existing habitat that lead to the 'National Heritage Priority Site' designation in the first place.

Professional Planner George A. Ritter echoed ASGEC's opinion, stating that the Solberg property "is of the same general character as Readington Township as a whole with regard to the occurrences of wetland, forest, surface waters, floodplains and other natural features . . . . Further, critical grassland habitat area found on the Solberg Property can be found in abundance in many areas of Readington Township." In a certification, Ritter stated that the amount of open space and preserved farmland in the Township "so greatly exceeds all of the accepted standards for public open space as well as developed recreation land ...


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