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Township of Bethlehem v. State

March 15, 2010

TOWNSHIP OF BETHLEHEM, APPELLANT,
v.
STATE OF NEW JERSEY, STATE AGRICULTURE DEVELOPMENT COMMITTEE, RESPONDENT.
IN RE: ENNIS FARM DEVELOPMENT EASEMENT BLOCK 44, LOTS 22 AND 22.03.



On appeal from the Final Decision of the State Agriculture Development Committee.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted December 1, 2009

Before Judges Wefing, Messano and LeWinn.

The Township of Bethlehem (the Township) appeals from the State Agriculture Development Committee's (the SADC) denial of the Township's application for funds to defray costs incurred in acquiring certain real property, commonly known as the Ennis Farm (the property), with the intention to preserve a portion as farmland. The Township contends that the SADC's decision was arbitrary, capricious and unreasonable; it also argues that the SADC should be equitably estopped from denying the funds.

We have considered the arguments raised in light of the record and applicable legal standards. We affirm.

I.

In October 1999, the owner of the property, Adolphus Busch, notified the Township of his desire to sell the development rights to the property to the Township in conjunction with its application to the SADC for a Planning Incentive Grant (PIG) under the State Agriculture Retention and Development Act (ARDA), N.J.S.A. 4C:1-11 to -48. The Township submitted its application on November 1, 1999. The application anticipated that a portion of the total acreage, approximately three acres, would be excluded from the preservation easement as an "exception area," upon which the existing farmhouse would remain and residential use would be permitted.

The SADC granted preliminary approval to the application on January 27, 2000. Pursuant to PIG program regulations, the property was appraised by two independent appraisers with the fair market value of the easement determined to be between $5800 and $6900 per acre. Those appraisals were reviewed by the SADC staff, which, on April 26, 2001, certified the "development easement value" as of September 1, 2000 to be "$6,000/acre."

Several weeks earlier, however, on April 5, 2001, the Township engaged in a series of transactions with the property's then-current owners, Troy and Kirsten Ennis.*fn1 First, the Ennises conveyed the entire property to the Township in fee simple for $902,000, part of the purchase price being the Township's assumption of $295,000 of existing mortgages. On the same day, the Township transferred a portion of the property back to the Ennises, who paid the purchase price by re-assuming the mortgages. As a result, the Township acquired the development easement area for a net price of $607,000, or $7200.50 per acre. On December 18, 2002, the SADC granted final approval to the Township's PIG application.

However, because the Township's acquisition of the property resulted in two separate exception areas of one and two acres each, as opposed to a single parcel of three acres, the Township submitted an amended PIG application. Revised appraisals valued the development easement as between $5800 and $6500 per acre.

On January 26, 2006, the SADC re-certified the value to be $5800 per acre.

It is apparent from the record that the SADC questioned the manner in which the Township had structured the acquisition of the easement rights. An e-mail in February 2006 from the SADC to the Township's attorney raised a concern "that IF the Township only purchased the easement . . .[,] then they (sic) paid higher than the highest appraised value for the easement (per acre). In such cases the SADC is prohibited from cost sharing on the reimbursement for the easement." The Township's attorney responded

From what we have been able to reconstruct in discussions with the folks who were around at the time of the purchase, the Twp[.] Committee knew they [sic] were paying a premium for the property above the certified value and they [sic] knew the Twp[.] would have to eat the difference between the certified value and the purchase ...


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