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Judith S. Feld, Robert M. Feld, and the Four Felds v. the City of Orange Township

March 8, 2012


On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-10421-09.

Per curiam.


Argued December 19, 2011 -

Before Judges Sabatino, Ashrafi and Fasciale.

Plaintiffs are non-resident property owners and taxpayers in the City of Orange Township ("Orange" or "the township"). They have filed at least eight lawsuits against Orange and its governing officials challenging various municipal actions.

This appeal is from a November 19, 2010 order of the Law Division dismissing plaintiffs' action in lieu of prerogative writs. Plaintiffs sought to set aside the conveyance by Orange of sixteen parcels of land in a blighted area to a private entity, defendant RPM Development, LLC, ("RPM"), for the purpose of building affordable housing and revitalizing commerce in the township. Plaintiffs also appeal from a February 4, 2011 order of the Law Division denying their motion for reconsideration. We now affirm the Law Division's orders.

In its November 19, 2010 oral decision, the Law Division described Orange as "a distressed city with an ailing economy and acute shortage of affordable housing, and a declining tax base." In 2003, Orange enacted the Hope VI Redevelopment Plan to address some of these problems. In 2009, the plan was amended and renamed the Central Orange Redevelopment Plan. Pursuant to the redevelopment plan, Orange obtained a grant of $1.5 million from the New Jersey Department of Community Affairs' Neighborhood Stabilization Program and title to properties within the blighted area.

On November 4, 2009, the township council adopted Resolution 335-2009, which authorized the sale of sixteen lots to defendant RPM, a private for-profit developer of low-income housing. The resolution stated that the land would be conveyed in exchange for one dollar per parcel and certain specified commitments made by RPM for prompt development of the lots. RPM agreed to construct one- and two-family houses on the land within thirty-six months. It also agreed to employ minority workers and city residents, to make residents of Orange a minimum thirty-five percent of the construction workforce and twenty percent of the permanent workforce, to purchase goods and services from local merchants and businesses, and to implement traffic and safety controls as needed. On March 2, 2010, RPM and Orange entered into a redevelopment agreement that included the conditions of the conveyance as stated in the resolution.

Before the redevelopment agreement was executed, however, plaintiffs filed their complaint in lieu of prerogative writs to set aside Resolution 335-2009 conveying the land. In what might be described as a scattershot approach to litigation, plaintiffs raised many issues, which they have repeated in their brief on appeal.*fn1 Plaintiffs' arguments boil down to three primary claims: (1) that conveyance of the land required enactment of an ordinance by the municipal governing body and could not be effected by means of a resolution; (2) that the township council acted arbitrarily, capriciously, and unreasonably in conveying municipal land because there was inadequate consideration for the conveyance and no appraisals were obtained, among other reasons; and (3) that RPM failed to provide a so-called "pay-to-play certificate" before the township entered into the agreement to convey the land.

The standard of judicial review applicable to actions of municipal governments is highly deferential. Courts do not sit in judgment of the wisdom of municipal actions. Municipal ordinances and resolutions are presumed to be valid and rational. See First Peoples Bank of N.J. v. Twp. of Medford, 126 N.J. 413, 418 (1991); Hutton Park Gardens v. Town Council of W. Orange, 68 N.J. 543, 564 (1975). In the absence of a constitutional or statutory violation, municipal action may be overturned only if it was arbitrary, capricious, or unreasonable. Powerhouse Arts Dist. Neighborhood Ass'n v. City Council of Jersey City, 413 N.J. Super. 322, 332 (App. Div. 2010), certif. denied, 205 N.J. 79 (2011).

We reject plaintiffs' contention that Orange could not legally convey its blighted parcels to RPM without enacting an ordinance. N.J.S.A. 40A:12-13 lists three specific ways that a municipality can sell property it owns. One is by public auction, N.J.S.A. 40A:12-13(a); the second is by private sale in five specific circumstances, N.J.S.A. 40A:12-13(b); and the third is by private sale to a developer under the "Local Redevelopment and Housing Law" (N.J.S.A. 40A:12A-1 to -73), N.J.S.A. 40A:12-13(c). An ordinance must be enacted to authorize private sales by municipalities under subsection (b) of the statute. Subsection (c), however, is silent as to what form of municipal action is required to authorize private sales to a developer under the Local Redevelopment and Housing Law.

Plaintiffs argue that the subsections should be read in conformity so that municipalities are deemed authorized to act only by ordinance when they sell land to a private entity. Defendants respond that municipalities are free under subsection

(c) to choose between acting by ordinance or resolution.

In Fraser v. Township of Teaneck, 1 N.J. 503, 507 (1949), the Court stated: "it is well settled that where a statute fails to indicate whether the power should be exercised by ordinance or resolution it may be done by either means." Accord Twp. of N. Bergen v. City of Jersey City, 232 N.J. Super. 219, 224 (App. Div.), certif. denied, 117 N.J. 632 (1989). Because N.J.S.A. 40A:12-13(c) does not require action by enactment of an ordinance, a resolution ...

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