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The Times of Trenton Publishing Corp. v. Lafayette Yard Community Development Corporation

368 N.J. Super. 425, 846 A.2d 659 (App. Div. 2004)

REDEVELOPMENT; PUBLIC HEARINGS—A special purpose, private, non-profit entity set up to redevelop government land is similar enough to a governmental agency as to require its meetings to be open to the public.

An entity was hired by the local municipality to redevelop a tract of land donated to the entity by the municipality. The entity was incorporated as a private, non-profit corporation, pursuant to the New Jersey Nonprofit Corporation Act, for the express purpose of redeveloping the donated land. Its board was appointed by the mayor and municipality’s council. Possession of the land would revert back to the municipality after the project was completed.

A local newspaper reporter was barred from attending the corporation’s board meeting. It then claimed that it had a right to attend the meeting under the Open Public Meetings Act (OPMA). The mayor took the position that the corporation was a private organization to which the OPMA did not apply. The parties then negotiated an agreement to permit the reporter to attend the monthly meetings, but in a limited way. After the reporter was repeatedly asked to leave during the course of the meetings, the newspaper sued, seeking to prevent the board from closing its meetings to the public in violation of the OPMA, and requiring the minutes of all past and future meetings to be available to the public, also as required by the Open Public Records Act (OPRA). The lower court held that the corporation was not a public body within the meaning of the OPMA, nor a public agency within the meaning of the OPRA, and dismissed the complaint.

The Appellate Division reversed. The OPMA requires that the public and the press have advance notice of, and the opportunity to attend, most meetings, including executive sessions, of public bodies. A ‘public body’ is defined in the OPMA as two or more persons collectively empowered as a voting body to perform a public governmental function affecting the rights, duties or other legal relations of any person or collectively organized to spend public funds. The lower court had already found that the corporation consisted of “two or more persons collectively empowered as a voting body.” The Appellate Division, however, disagreed with the lower court’s finding that the newspaper failed to demonstrate that the board either performed a public governmental function or was collectively authorized to spend public funds. The Court examined the corporation’s governing documents, the municipality’s resolutions, and the agreements between the municipality and the entity. The entity’s certificate of incorporation stated that its purpose was to redevelop municipal property. Its bylaws stated that its board members were to be appointed and removed by the mayor and council. The disposition agreement provided for the municipality to transfer the public property to the corporation for $1.00, and for the corporation to issue tax-exempt, municipally guaranteed bonds to finance the project and reimburse the municipality for its costs to acquire the property. The property disposition agreement specifically stated that the redevelopment of the property was in the best interest of the municipality and the health, safety, and welfare of its residents; and that the project was “undertaken in accordance with [those] public purposes.” Therefore, the Court found that the project was explicitly created for public purposes.

The Appellate Division next looked to the Redevelopment Law which authorized the creation and funding of the corporation. In adopting the law, the Legislature stated that its purpose was to reverse deteriorating housing, commercial, industrial, and civic facilities, and to promote the advancement of community interests through those facilities. Under this law, a municipality may undertake a redevelopment project by redeveloping the area itself, or through a public entity, or through a created municipal redevelopment agency or by designated a private redevelopment entity. By dint of the Legislature’s stated intent, the Court found that redevelopment is a governmental function for the benefit of the public, regardless of how it is undertaken.

The Court also looked at the project under the public trust doctrine, which is premised on the rights of all citizens to use and benefit from public property. It held that conveying the land to the corporation, at a nominal price, and the reversion of the land and project to the municipality after repayment of the debt, established a “public trust” with the corporation as the trustee. A trustee is a person or entity who is appointed to execute a trust. The corporation was charged with developing and operating, through its contractor, a revenue-generating asset for the benefit of the municipality. The project was built on land furnished by the municipality, funded by tax-exempt bonds unconditionally guaranteed by the municipality. It was intended to provide jobs and tax revenues, and was scheduled to revert back to the municipality after payment of the debt. Based on those facts, the Appellate Division found the corporation to be a public body empowered to perform a governmental function affecting rights, duties, or other legal relations of “any other person.”

In addition, under Article VIII, Section III, paragraph 3 of the New Jersey Constitution, a governmental entity is prohibited from giving property, lending money, or extending credit to a private entity for private use. The provision also expresses the fundamental principle that public money should be raised and used only for public purposes. A “public purpose” is an activity which serves as a benefit to the community as a whole, and at the same time is directly related to the functions of the government. Therefore, where a funded activity serves a benefit to the community and is directly related to the functions of government, the donation of public land to a private redeveloper passes constitutional muster. Furthermore, in terms of public policy, the Appellate Division stated that the democratic process is enhanced when citizens have the right to attend all meetings of public bodies at which business affecting the public is discussed or acted upon in any way.

The Open Public Records Act was expressly intended by the Legislature to make records of a public agency readily accessible for inspection by the citizens. Courts have held that a newspaper has the same right of access. A “public agency” is defined in the OPRA as “any division, board, bureau, office, commission or other instrumentality within or created by a political subdivision of the state.” Here, the Court decided that the corporation was an instrumentality created by the municipality and a public agency under the OPRA for the same reasons that it was a public body under the OPMA.

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