March 16, 2011
BETA REALTY UNIT 6 LLC, A NEW JERSEY LIMITED LIABILITY COMPANY, PLAINTIFF-APPELLANT,
TOWNSHIP OF RANDOLPH, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3657-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 5, 2011
Before Judges Ashrafi and Nugent.
Plaintiff Beta Realty Unit 6 LLC appeals from a final judgment denying its claim for refund of a development fee it paid to defendant Township of Randolph. We affirm.
In 2005, Randolph Township enacted its Ordinance 31-05, by which the township required that non-residential developers pay a fee of 2.0% of the equalized assessed value of improvements they planned to construct. The purpose of the fee was to help fund the township's obligation to provide low and moderate income housing as required by the Mt. Laurel doctrine*fn1 and the Fair Housing Act, N.J.S.A. 52:27D-301 to -329.19.
Plaintiff owns a 10.55 acre tract in the township. In 2007, it filed an application with the township planning board for site plan approval to build an indoor tennis facility. By resolution dated February 28, 2008, the planning board granted preliminary and final approval with the necessary variances and waivers. As determined at a later time, the development fee payable to the township under its ordinance would be $46,500.*fn2
In July 2008, the Statewide Non-Residential Development Fee Act ("Fee Act"), L. 2008, c. 46, §§ 32-38 (N.J.S.A. 40:55D-8.1 to -8.7), was enacted. That legislation superseded local development fee ordinances and provided for uniform fees for funding Mt. Laurel housing. As of its effective date, July 17, 2008, the Fee Act set non-residential development fees at 2.5% of equalized assessed value of both the improvements and the land being developed. N.J.S.A. 40:55D-8.4a(1).
As a result of the new State legislation, the township determined that plaintiff was required to pay $94,702.50 for development of its tennis facility. In December 2008, plaintiff applied for a building permit and paid to the township one-half that amount, $47,351.25. The tennis facility was built and opened for business in 2009.
Because of the nationwide economic recession, another State law was enacted in July 2009 that affected the development fee payable by plaintiff. The New Jersey Economic Stimulus Act, L. 2009, c. 90 (N.J.S.A. 52:27D-489a to -489o), canceled for several years the collection of development fees in order to stimulate commercial development of land. See L. 2009, c. 90, § 37, amending N.J.S.A. 40:55D-8.6. As applied to this case, the Stimulus Act relieved plaintiff of any further payment and also provided for refund of fees already paid under the Fee Act. L. 2009, c. 90, §39 (N.J.S.A. 40:55D-8.8). However, the Stimulus Act excluded any refund of development fees that a developer had committed to pay before July 17, 2008. Ibid.
In the summer of 2009, plaintiff sought a refund of the $47,351.25 it had paid in December 2008. The township responded by letters from its attorneys in August and September 2009 acknowledging that plaintiff's development was exempt from payment under the new State laws but declining to grant a full refund. The township determined that plaintiff had committed to pay $46,500 under the township ordinance before July 17, 2008, and it was only entitled to a refund of $851.25, the difference between the amount committed and plaintiff's actual payment of $47,351.25. The township also charged plaintiff $2,320 for its own attorney's fees in responding to the request for a full refund.
In November 2009, plaintiff filed a three-count complaint in lieu of prerogative writs against the township. In count one, plaintiff claimed entitlement to a full refund on the ground that its tennis facility is exempt from payment under the Fee Act. In count two, plaintiff claimed it is also entitled to a full refund under the Stimulus Act. In count three, plaintiff challenged the attorney's fees the township had charged to plaintiff. The township filed an answer denying plaintiff's claims and a counterclaim for its attorney's fees.
Both parties immediately moved for summary judgment. The trial court heard argument on March 5, 2010. The court requested further development of the factual record so that it might evaluate whether the tennis facility is exempt under the Fee Act. The parties submitted supplemental certifications addressing the operations of the tennis facility.
By judgment order and a short written opinion dated March 24, 2010, the court granted summary judgment to defendant township dismissing plaintiff's claims for a full refund and concluding that the township was entitled to retain a development fee of $46,500 under its ordinance. On count three of the complaint and the township's counterclaim, the court granted summary judgment to plaintiff denying the township's demand for its attorney's fees. Plaintiff appealed; the township did not file a cross-appeal.
In reviewing a grant of summary judgment, we apply the same standard under Rule 4:46-2(c) that governs the trial court. See Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007). We must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Here, both sides have argued that summary judgment is appropriate because the dispute involves legal questions rather than disputed facts, that is, the interpretation of statutes.
Plaintiff contends its tennis center is exempted from payment of a development fee by N.J.S.A. 40:55D-8.4b(2), which provides:
[T]he following shall be exempt from the imposition of a non-residential development fee:
(2) any non-residential development which is an amenity to be made available to the public, including, but not limited to, recreational facilities, community centers, and senior centers, which are developed in conjunction with or funded by a non-residential developer. [Ibid. (emphasis added).]
Plaintiff argues that the plain meaning of the statute applies to its tennis facility because it is a "recreational facility" which is "made available to the public."
The statute further defines its terms as follows:
"recreational facilities and community center" means any indoor or outdoor buildings, spaces, structures, or improvements intended for active or passive recreation, including but not limited to ball fields, meeting halls, and classrooms, accommodating either organized or informal activity; and "senior center" means any recreational facility or community center with activities and services oriented towards serving senior citizens. [N.J.S.A. 40:55D-8.4b.]
There is no dispute that plaintiff's tennis center is a building or structure intended for active recreation, and thus, a recreational facility under the statute. The parties disagree, however, whether it is an "amenity . . . made available to the public." Plaintiff argues its facility is available to the public because anyone can play tennis there. The township contends that the facility is not available to the public because a substantial price is charged for use of the facility, and the statutory exemption is not intended to apply to such a privately-owned commercial enterprise.
The certification submitted by the president of the tennis center states that the facility is open to all persons. A fee of $53 for one hour of court time is charged to non-members. According to an advertisement attached to the certification, the public may obtain a membership at a cost of $100 for an adult, $50 for children and teenagers, $175 for a family, and no charge above age sixty-two. The benefits of membership include a reduced hourly rate of $47 for court time from 9:00 a.m. to closing time, and further reduced "early bird" and late night rates. In addition, a thirty-five week seasonal membership is available for $1,645. Although the advertisement implies that the facility is open only to members from 6:00 a.m. to 9:00 a.m., the president states in her certification that any person can play at any time when the facility is open as long as a court is available. There is a factual dispute between the certification of the president and that of a municipal official regarding whether membership also provides advantages in reserving court time.
The trial court considered the differences in availability for members and non-members, but those differences were only partially significant to its decision. The court stated:
The clear intent of the non-residential development fee exemption at issue is that the developer either gives a public recreational benefit at a substantially reduced cost or no cost to the public as part of its development, or funds such a public benefit. A Tennis facility charging $53 an hour to the public and classifying the public as non-members does not fall within these exemption parameters.
We agree. We add that, in the end, the differences between member and non-member rates and benefits do not affect our conclusions as to application of the Fee Act.
Our standard of review is plenary in determining a legal question - namely, what the statutory exemption means by the phrase "an amenity . . . available to the public." See Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). To decide that issue, we need not determine every context in which the statutory language might apply. We need only decide how it applies in the circumstances of this case.
"A court's role in statutory interpretation 'is to determine and effectuate the Legislature's intent,' and generally, the best indicator of that intent is the statutory language itself." Ryan v. Renny, 203 N.J. 37, 54 (2010) (quoting Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 553 (2009)). The "words chosen by the Legislature" should be read "'within their context' and give[n]  'their generally accepted meaning.'" State v. Marquez, 202 N.J. 485, 499 (2010) (quoting N.J.S.A. 1:1-1)). "As a general rule, when the language of a statute is clear on its face," that ordinary meaning should govern the court's interpretation. Hubbard v. Reed, 168 N.J. 387, 392 (2001). But "a court should read the disputed language 'in context with related provisions so as to give sense to the legislation as a whole.'" Ryan, supra, 203 N.J. at 54 (quoting DiProspero v. Penn, 183 N.J. 477, 492 (2005)).
"If the plain language of a statute is ambiguous or open to more than one plausible meaning, [a court] may consider extrinsic evidence including legislative history and committee reports." Marquez, supra, 202 N.J. at 500. In any event, "an interpretation of a statute should not lead to an absurd result." In re Young, 202 N.J. 50, 69 (2010); accord Twp. of Pennsauken v. Schad, 160 N.J. 156, 170 (1999).
Plaintiff asserts that its facility is available to the public because any person can pay the established prices and use the facility. The township contends that payment of a substantial fee means that the facility is not available to the public but only to those willing and able to pay. The township argues that an amenity available to the public is in the nature of municipal facilities and services, or social and recreational facilities such as those found in condominium and townhouse communities available for use without charge or at minimal cost to all members of the community. Each party's interpretation is plausible when only the disputed statutory phrase is considered. We conclude that the meaning of an "amenity . . . available to the public" is ambiguous.
Neither party has provided legislative history to aid our interpretation. We can, however, look to the purposes stated in the Fee Act itself, and to related statutory provisions, to determine legislative intent. In its findings and declarations, the Legislature stated that the purpose of the Fee Act is to "balance the needs of developing and redeveloping communities" as "land resources are becoming more scarce," N.J.S.A. 40:55D- 8.2b, and to "provide a fair and balanced funding method to address the State's affordable housing needs," N.J.S.A. 40:55D-8.2c. The Legislature expressed no intent in its findings and declarations to encourage development of all kinds of recreational facilities, as plaintiff contends, including commercial facilities developed for the profit of private owners.
A provision of the statute exempts hospitals and nursing homes from payment of the development fee, but only if they are nonprofit. N.J.S.A. 40:55D-8.4b(3). Also, the statute exempts "property used for educational purposes, which is tax-exempt" in accordance with N.J.S.A. 54:4-3.6. Under the last-cited statute, property owned by a school or college is not tax-exempt if it is used for profit-making purposes. See N.J. Carpenters Apprentice Training and Educ. Fund v. Bor. of Kenilworth, 147 N.J. 171, 173 (1996), cert. denied, 520 U.S. 1241, 117 S. Ct. 1845, 137 L. Ed. 2d 1048 (1997); see also Town of Morristown v. Woman's Club of Morristown, 124 N.J. 605, 610, 619 (1991) (only a nonprofit organization is entitled to property tax exemption under N.J.S.A. 54:4-3.52 for a historic site).
In exempting an "amenity . . . made available to the public," the statute does not expressly state that the amenity must operate without profit. But in defining "recreational facilities and community center," the statute provides examples of "ball fields, meeting halls, and classrooms." N.J.S.A. 40:55D-8.4b. It provides no examples that describe a commercially-based recreational activity similar to plaintiff's tennis center. In fact, the reference to "classrooms" as an example of a potentially-exempt amenity must be viewed in conjunction with other parts of N.J.S.A. 40:55D-8.4b exempting only educational facilities that are nonprofit. A classroom built for profit-making purposes cannot be both exempt from payment under the Fee Act because it fits the definition of an amenity made available to the public and not exempt under the same statute because it is used for profit.
It would be odd, indeed, for the same statute to exempt schools, hospitals, and nursing homes from payment of a development fee only if they are not profit-making facilities but exempt recreational facilities that are built for the purpose of profiting their owners. Under plaintiff's interpretation of the statute, construction of professional sports stadiums, movie theaters, gambling casinos, privately-owned golf courses, and many similar facilities would all be exempt from payment of development fees as long as they admit the public. Enjoying the benefits of such privately-owned facilities, however, is often conditioned upon payment of substantial ticket prices or other costs.
Being open to the public for business is not the same as being available to the public. Most commercial establishments are open to the public for their patronage, but the goods and services sold are available only to those who pay for them. Here, plaintiff's tennis courts are available only to members and non-members who pay substantial fees to make use of them, and the purpose of the fees is to support a private, commercial enterprise.
Plaintiff argues that charging a fee for use of the facility cannot be the basis for distinguishing exempt from non-exempt developments. It points to the township's own outdoor tennis courts, for which the township charges fees.*fn3 We have no occasion in this case to determine the amount of fees that can be charged and yet retain exemption under the Fee Act. We note that the judiciary in this State also charges fees for use of its services, but no one would say that our courtrooms are not available to the public. Of course, the judicial system waives its fees for those who are indigent. R. 1:13-2. These types of modest service fees do not support a commercial enterprise. Cf. Univ. Cottage Club of Princeton N.J. Corp. v. Dept. of Envtl. Prot., 191 N.J. 38, 49 (2007) (for property to be exempt from property tax as a historic site, public access must be available in accordance with N.J.S.A. 54:4-3.54b(a)(4), which statute requires that "the building is open to the general public and freely available to all people . . . under reasonable terms and conditions, including but not limited to a nominal fee" (emphasis added)).
We conclude the Legislature did not intend to exempt a commercial recreational facility such as plaintiff's that is open to the public but charges a substantial fee. The Legislature expressed a contrary purpose by limiting exempt "amenities" to those that are "made available to the public." The word "available" in the context of the statute as a whole does not mean available at a substantial cost.
The trial court correctly granted summary judgment dismissing plaintiff's claim for exemption under the Fee Act.
Plaintiff argues alternatively that it is entitled to a full refund under the provisions of the Stimulus Act.
The Stimulus Act noted "the negative impact of a State policy" that "impose[s] fees and charges on developers," and it sought to strike a balance between the need to fund affordable housing in this State and to encourage economic activity. See L. 2009, c. 90, § 36f (N.J.S.A. 40:55D-8.2f). Pertinent to the one-year old Fee Act, the Legislature made the following findings and declarations in 2009:
It is undisputable that the charging of fees at high levels dissuades commerce from locating within a State or municipality or locality and halts non-residential and residential development, and these ill effects directly increase the overall costs of housing, and could impede the constitutional obligation to provide for a realistic opportunity for housing for families at all income levels. [Ibid.]
These findings led to a moratorium on non-residential development fees. The Stimulus Act canceled collection of development fees for non-residential developments that have received approval as of July 1, 2010, and that obtain a permit for construction before January 1, 2013. See L. 2009, c. 90, § 37, amending N.J.S.A. 40:55D-8.6. It also provided for refund of fees already paid under the Fee Act, that is, after July 17, 2008. Id. § 39 (N.J.S.A. 40:55D-8.8). However, as stated earlier, the developer is not entitled to a refund of fees it had committed to pay before July 17, 2008. Ibid.; see also L. 2009, c. 90, § 37 (N.J.S.A. 40:55d-8.6a) (cancellation of development fees does not apply "to a financial or other contribution that a developer made or committed itself to make prior to the effective date of" the Fee Act).
Plaintiff seeks a full refund of its payment under N.J.S.A. 40:55D-8.8a, which states in relevant part:
A developer of a property that received preliminary site plan approval . . . or final approval . . . prior to July 17, 2008 and that was subject to the payment of a nonresidential development fee prior to the enactment of [the Stimulus Act], shall be entitled to a return of any moneys paid that represent the difference between the moneys committed prior to July 17, 2008 and monies [sic] paid on or after that date.
Plaintiff received preliminary and final site plan approval on February 28, 2008, and it was subject to payment of a nonresidential development fee, first under the township ordinance and then under the Fee Act. It paid $47,351.25 after July 17, 2008. The disputed issue is whether plaintiff committed to pay any amount before that date.
The township contends that plaintiff was committed to payment of $46,500 under the township ordinance as soon as it received final site plan approval in February 2008. Plaintiff argues that the statutes define the meaning of monies committed, and that the definition does not apply in this case.
N.J.S.A. 40:55D-8.6c states:
For purposes of this section, a developer is considered to have made or committed itself to make a financial or other contribution, if and only if: (1) the contribution has been transferred, including but not limited to when the funds have already been received by the municipality; (2) the developer has obligated itself to make a contribution as set forth in a written agreement with the municipality, such as a developer's agreement; or (3) the developer's obligation to make a contribution is set forth as a condition in a land use approval issued by a municipal land use agency pursuant to the 'Municipal Land Use Law.' [(Emphasis added).]
Here, plaintiff made no payment before July 17, 2008, and it did not enter into a written agreement with the township to pay a development fee. The only applicable provision of the statute is subsection (3), the emphasized language quoted above.
Plaintiff argues that the resolution of the planning board approving its development application did not include a specific condition requiring payment of a development fee. The township responds that the site map signed by plaintiff's representative and approved through the planning board's resolution included a reference to "Developer Fee Ordinance Requirement" and that such a reference was equivalent to a condition imposed in granting approval for the development. We agree with the township's argument.
Although the planning board's resolution did not expressly state a condition that plaintiff must pay the development fee required by Ordinance 31-05, that fee was not a charge that the planning board had discretion to impose or to waive. The ordinance established a mandatory fee applicable to all developers. In addition, the planning board's resolution stated that its "approval is based upon [plaintiff's] plans," which included the March 28, 2007 site map that contained the reference to the developer fee ordinance requirement. The resolution then stated the following stipulation and condition of approval:
The Applicant shall comply with any and all conditions, requirements and agreements set forth in the "Whereas" portion of this resolution, as well as any and all representations made to the Board orally or in writing whether contained in this resolution or not.
This provision was sufficient to meet the statutory definition in N.J.S.A. 40:55D-8.6c(3). By requiring that plaintiff comply with representations it had made orally or in writing, including those contained in its site map, the planning board imposed a condition that plaintiff pay the appropriate development fee required by the township ordinance.
We conclude that the trial court correctly determined that plaintiff had committed to pay a development fee of $46,500 under the township ordinance before July 17, 2008, and therefore, was not entitled to refund of that amount.