IN THE MATTER PROTEST OF HARTZ MOUNTAIN INDUSTRIES, INC. AND EXPO PARK
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NOS. A-1169-03T31169-03T3
A-1218-03T3
A-1243-03T3
A-2657-03T3
A-2734-03T3
A-1433-04T3
A-1451-04T3
A-3830-04T3
A-4394-04T3
IN THE MATTER OF THE PROTEST OF
HARTZ MOUNTAIN INDUSTRIES, INC.
AND EXPO PARK, TO THE PROPOSAL
AND AWARD OF DEVELOPMENT RIGHTS
FOR THE CONTINENTAL AIRLINES
ARENA SITE AT THE MEADOWLANDS
SPORTS COMPLEX.
ELLIOT BRAHA, RICHARD DELAURO,
GEORGE PERRY and CAROL CORONATO,
Appellants,
v.
NEW JERSEY SPORTS & EXPOSITION
AUTHORITY, THE MILLS CORPORATION,
and MACK-CALI REALTY CORPORATION,
Respondents.
IN RE PROTEST OF WESTFIELD AMERICA,
INC. TO THE NEW JERSEY SPORTS &
EXPOSITION AUTHORITY'S RESOLUTION
2003-26 ADOPTING THE HEARING
OFFICER'S REPORT AND RECOMMENDATION.
IN THE MATTER OF THE NJSEA'S
EXECUTION OF A DEVELOPER'S
AGREEMENT FOR THE CONTINENTAL
AIRLINES ARENA SITE AT THE
MEADOWLANDS SPORTS COMPLEX.
IN THE MATTER OF THE NJSEA'S
EXECUTION OF A DEVELOPER'S
AGREEMENT FOR THE CONTINENTAL
AIRLINES ARENA SITE AT THE
MEADOWLANDS SPORTS COMPLEX.
IN THE MATTER OF THE NJSEA'S
ADOPTION OF RESOLUTION 2004-36
REGARDING THE XANADU REDEVELOPMENT
PROJECT AT THE CONTINENTAL
AIRLINES ARENA SITE AT THE
MEADOWLANDS SPORTS COMPLEX.
IN THE MATTER OF THE NJSEA'S
ADOPTION OF RESOLUTION 2004-36
REGARDING THE XANADU REDEVELOPMENT
PROJECT AT THE CONTINENTAL
MEADOWLANDS SPORTS COMPLEX.
IN THE MATTER OF THE PROTEST OF
HARTZ MOUNTAIN INDUSTRIES, INC.
AND EXPO PARK, TO THE PROPOSED
XANADU PROJECT FOR THE CONTINENTAL
AIRLINES ARENA SITE, AND IN THE
MATTER OF THE NJSEA'S ADOPTION OF
A RESOLUTION ON MARCH 30, 2005,
DENYING A STAY OF CONSTRUCTION OF
THE XANADU PROJECT.
ELLIOT BRAHA, RICHARD DELAURO,
GEORGE PERRY and CAROL
CORONATO,
Appellants,
v.
NEW JERSEY SPORTS & EXPOSITION
AUTHORITY, INC., THE MILLS
CORPORATION, and MACK-CALI
REALTY CORPORATION,
Respondents.
Argued: May 8, 2006 - Decided:
Before Judges Fall, Yannotti and Miniman.
On appeal from several final administrative decisions of the New Jersey Sports & Exposition Authority, and from the Superior Court of New Jersey, Law Division, Bergen County, docket number BER-L-3769-03.
Justin P. Walder and Irwin A. Horowitz argued the cause for appellant Hartz Mountain Industries, Inc. in A-1169-03T3, A-2657-03T3, A-1433-04T3 and A-3830-04T3 (Walder, Hayden & Brogan and Horowitz, Rubino & Patton (Messrs. Walder and Horowitz, of counsel; Shalom D. Stone, D. Mark Leonard, and Asaad K. Siddiqi, on the brief).
Barry D. Epstein argued the cause for appellants Elliot Braha, Richard DeLauro, George Perry, and Carol Coranato in A-1218-03T3 and A-4394-04T3 (Epstein Beirne, attorneys; Mr. Epstein and Alice Beirne, on the brief).
Timothy J. O'Neill argued the cause for respondent New Jersey Sports & Exposition Authority in all appeals (Windels Marx Lane & Mittendorf, attorneys; Mr. O'Neill, of counsel, and Charles M. Fisher, Ellen M. Christoffersen, Lisa D. Cornacchia, and Sandy L. Galacio, on the briefs).
Michael R. Cole argued the cause for respondents The Mills Corporation and Mack-Cali Realty Corporation in all appeals (DeCotiis, Fitzpatrick, Cole & Wisler, attorneys; Mr. Cole, of counsel; Benjamin Clarke, Gregory J. Bevelock, and Alice M. Penna, on the briefs).
Pitney, Hardin, attorneys for appellant Westfield America, Inc. in A-1243-03T3, A-2734-03T3 and A-1451-04T3 (Peter J. Herzberg, on the brief).
PER CURIAM
In these nine consolidated appeals, this is our third occasion to consider the challenges by Hartz Mountain Industries, Inc. (Hartz Mountain); Westfield America, Inc. (Westfield); and Elliot Braha, Richard DeLauro, George Perry and Carol Coronato (Braha) to final administrative decisions issued by the New Jersey Sports and Exposition Authority (NJSEA or Authority) approving the award of a contract based on a bid for the Xanadu Project proposal submitted by The Mills Corporation and Mack-Cali Corporation (Mills/Mack-Cali) for the redevelopment of the Continental Airlines Arena Site at the Meadowlands Sports Complex.
For the reasons expressed hereafter, we conclude that the broad statutory authority granted to the NJSEA to develop the Meadowlands Sports Complex permitted the Authority to select the Xanadu project despite the proposed quantity of retail space included in the project. Furthermore, the Authority's Request for Proposals (RFP) did not prohibit proposals that competed with local businesses, but merely discouraged them, and thus the Xanadu project did not fail to conform to the RFP in any material way that required the NJSEA to reject the proposal. Neither was the proposal from Mills/Mack-Cali nonconforming in its lack of a proposed use for the Continental Arena or the absence of a profit-sharing component, which was not required by the RFP.
We also conclude that the various contacts between the NJSEA and Mills over the years prior to the RFP did not render the RFP process unfair. We are also satisfied that no undue advantage was obtained by Mills/Mack-Cali from its transfer of the Empire Tract to the State nor from the financial transaction in connection with that transfer because the RFP did not constrain how the proposers were to respond and the Authority is statutorily empowered to acquire abutting lands.
Although there were competing analyses of the financial returns from the Xanadu proposal, the NJSEA was not required to adopt the most remunerative proposal because financial return was only one of numerous strategic planning goals and, in any event, there was substantial record evidence to support the Authority's conclusion that the Mills/Mack-Cali proposal was financially superior.
We also conclude that the hearing provided to Hartz and Westfield was consistent with all due process requirements and that the hearing officer was impartial and thoroughly considered all of the evidence and issues raised by Hartz and Westfield. Finally, we affirm the Authority's determination that Braha had no right to participate in the bid-protest hearings. His right to appeal from the Authority's bid award is limited to his right to appeal that action to us, and not to the Law Division, which properly dismissed Braha's complaint.
Because the issue is now before us, we conclude that the Xanadu project is a project of the Authority and statutorily exempt from all taxes and special assessments of the State or any of its political subdivisions. We also conclude that Braha's claim that Mills/Mack-Cali cannot make Payments in Lieu of Taxes (PILOT payments) is without merit and, in any event, the statute does not require PILOT payments to municipalities, here Jersey City, beyond those in which NJSEA property is located.
The following factual and procedural history is relevant to our consideration of the arguments advanced on appeal.
I.
On June 28, 2002, the NJSEA issued a public Request for Proposals (RFP) seeking a Master Developer for "Redevelopment of the Continental Airlines Arena Site." As described in the introduction of the RFP, the NJSEA was seeking development for the approximately 104-acre Arena site east of Route 120 by "creating a multi-use destination at the Arena site that capitalizes on existing uses at the Meadowlands and expands the product mix in a manner that is complementary to those uses, without materially competing with existing businesses in the Meadowlands District."
Thus, the NJSEA desired "to select a Master Developer to organize a cohesive plan for the Arena site that will connect to and integrate new development with the remainder of the Complex and existing facilities, particularly through uses that complement the Meadowlands Racetrack and are compatible with the operation of Giants Stadium." The RFP's introduction stated that:
Presently, the Continental Airlines Arena improves the Arena site, which is home to the New Jersey Nets and New Jersey Devils professional basketball and hockey franchises, respectively. Other events, including the circus, concerts, and other professional sporting events, are held at the Arena throughout the year.
The Authority has engaged in negotiations with the owner of these franchise teams to relocate them into a newly constructed Arena to be built in the City of Newark, New Jersey by the start of their respective 2005 seasons. Should these negotiations and efforts prove successful, upon relocating to a new Arena, it is anticipated that the teams' existing lease agreements will terminate and the Authority will agree not to conduct any events or other activity at the existing Arena in competition with the Newark Arena.
The RFP further stated:
The Authority is receptive to some or all of the following uses on the Arena site: dining, entertainment, retail, hotel, office, exposition facilities, recreation, parking and transportation centers, but will look to the development community and the marketplace to propose innovative uses that maximize the potential of the Arena site, best achieve the strategic goals of the Authority, are consistent with the Authority's public purpose as set forth in its enabling legislation, and promote smart growth and sound economic development in the region.
The RFP further explained that the NJSEA was "receptive to concepts that incorporate reuse of the Arena, provided the anticipated non-compete agreement with the proposed Newark facility is respected." Thus, the RFP did not set forth a plan for what the bidders should do with the Continental Airlines Arena itself; clearly, the bidders had the option of using that structure or razing it, provided that the anticipated non-compete agreement was respected.
The NJSEA explained that while its objective was to "maximize the economic potential of the Arena site, achieving this economic potential is not paramount and must be balanced against the public purpose of the Authority, the leasehold rights of the franchise tenants, the business needs of the Authority's assets, and the economic development needs of the region and the surrounding communities."
The RFP added that bidders should be guided by the NJSEA's strategic planning objectives, including to "[m]aintain and enhance the world-class status" of the sports complex "by creating a multi-use destination with a cohesive theme," "[c]reate a greater sense of place and improve aesthetics," "[a]chieve greater utilization" of the Arena site and a "higher degree of integration" with the NJSEA's venues and franchise tenants," [p]rotect and enhance the unique ecosystem of the Meadowlands," "[s]tabilize and increase" revenues of the complex's existing businesses through new business development, and "[p]roduce new economic activity that benefits the region and supports surrounding communities."
The RFP stated that the NJSEA was open to recommendations about the structure of the anticipated contractual arrangement, but set forth numerous characteristics of its "preference" for the contract, including that the NJSEA would continue to own the land, the developer would arrange all project financing with no risk to the NJSEA, the NJSEA would not assume any debt, and the NJSEA would receive land-lease fees and would participate in the profits of the project.
The RFP noted that the NJSEA was "committed to providing mass transit" to the Sports Complex, and "understands that the types and densities of land uses developed at the Arena site will influence the type of mass transit service to the Complex, if any, that could be provided economically." Accordingly, the NJSEA would "place a high premium on Concept Plans that affirmatively encourage the delivery of mass transit service through the appropriate mix of land use types and densities." The RFP described ongoing discussions involving Bergen County and New Jersey Transit to provide commuter rail service to the site.
The RFP set forth a schedule for the proposal process, beginning with a pre-proposal conference on July 15, 2002, and culminating with the receipt of final and best offers on December 30, 2002. The NJSEA planned to work through a Selection Committee from its members, and to consult with a Stakeholders Advisory Group comprised of community officials, businesses and other local representatives, and environmental interests. All communication through the RFP process was to take place through use of a website that could be accessed by all who intended to submit proposals; the NJSEA otherwise would maintain a "strict no contact policy," so bidders were directed not to contact the NJSEA during the proposal process.
In accordance with the established procedures, the Selection Committee would rank proposals based upon specific criteria, and then the NJSEA would try to negotiate a development agreement with the firm that submitted the highest-ranking proposal, proceeding down through the rankings if a development agreement could not be reached.
The NJSEA further provided that it "expects to follow the above-mentioned process; however, the Authority may deviate from this process if it is in the Authority's best interest to do so." Further, the NJSEA reserved the right to reject a proposal "for any reason and at any time."
The RFP noted that the site had a statutory exemption from local land-use regulations, and that "[t]his exemption would apply to the project that is the subject of this RFP." The RFP explained, however, that the NJSEA was required to consult with the New Jersey Meadowlands Commission (NJMC) and with the New Jersey Department of Environmental Protection (NJDEP) "before making any determination as to the location, type and character" of any NJSEA project at the Meadowlands, for the purpose of maintaining the environmental balance at the Meadowlands.
The RFP set forth a nine-section format for the proposals to be submitted, with attachments showing tabular formats to be used. For the Project Cost Summary, proposals were to follow the RFP's form Attachment II, and instructions stated, "[p]lease do not deviate from this format." For Projected Financial Results of the project (Attachment III A and B) and Proposed Financial Arrangements showing the expected return to the NJSEA (Attachment IV), the same sentence appeared in the instructions, to which was added: "Failure to respond in the required format will result in the response being deemed non-compliant."
The proposal submitted by Mills/Mack-Cali referred to the uncertainty of the negotiations with the Nets and Devils, and thus stated that elements of the Continental Airlines Arena "can be preserved or retrofitted for a convention center or other public uses." Mills/Mack-Cali presented its concept plan drawings in two formats, with the Arena intact and as converted to a convention center, but it did not set forth financial projections associated with a convention center in Sections Six and Seven of its proposal. Mills/Mack-Cali did include estimated jobs, associated revenue, and taxes that would be generated by a convention center.
Hartz Mountain's "Expo Park" proposal referred to the RFP as being based upon the "anticipated relocation of the existing Meadowlands [Continental Airlines] Arena." Hartz Mountain proposed to build a completely new 500,000-square-foot convention center on the site of the current Arena.
Westfield proposed that the current Arena be "preserved and transformed into a 250,000-square-foot multi-use performing arts and entertainment venue."
After each of the bidders made oral presentations to the NJSEA Selection Committee and the Stakeholders Advisory Group, the NJSEA narrowed the field to three "finalists," Hartz Mountain, Mills/Mack-Cali, and Westfield, and requested additional information on several occasions. Each proposer responded to the NJSEA's requests to submit additional information. In January 2003 Hartz Mountain submitted a request for certain public records pursuant to the Open Public Records Act (OPRA), N.J.S.A. 47:1A-1 to -13.
Then Mills/Mack-Cali alone was sent another request for additional information in February 2003, which asked for the exact square footage of the proposal that would be devoted to fashion and other retail uses.
At its regular meeting held on February 12, 2003, the Board of the NJSEA adopted Resolution 2003-11, which provided in pertinent part:
WHEREAS, it is the unanimous determination of the Selection Committee that the Meadowlands Xanadu Proposal submitted by the Mills Corporation and Mack Cali Realty Corporation best meets the strategic planning objectives of the Authority as set forth in the RFP.
NOW, THEREFORE, BE IT RESOLVED by the Board of the New Jersey Sports and Exposition Authority, that pursuant to N.J.S.A. 5:10-21.3(a) services which are professional or technical in nature or services which are original and creative in character in a recognized field of artistic endeavor, hereby authorizes:
The President and Chief Executive Officer, in consultation with the Selection Committee, to negotiate a Development Agreement with the Mills Corporation and Mack Cali Realty Corporation for the development of Meadowlands Xanadu at the Continental Airlines Arena site. This Development Agreement will be subject to the approval of the Board of the Authority.
During its February 12, 2003 press conference announcing the decision to negotiate a redevelopment agreement with Mills/Mack-Cali, the NJSEA released a four-page document describing the proposed deal. That document began with a five-part section headed "Proposed Economic Terms," which included: (1) guaranteed ground-rent payments in excess of $200 million over a 75-year lease term, including an initial lump-sum payment of $160 million in 2003, in lieu of ground lease payments for the first 15 years; (2) an undefined proposal for the NJSEA to share in a percentage of residual cash flow, if the project exceeded projections; (3) an "almost ten-fold increase" in tax payments to the Borough of East Rutherford and the surrounding communities in the form of Payments In Lieu Of Taxes (PILOT payments); (4) $65 million in road and infrastructure improvements; and (5) "Environmental Enhancements" by Mills/Mack-Cali's plan to convey its adjacent $96 million Empire Tract to the State or other entity, and Mills/Mack-Cali's proposal to operate a Wetlands Mitigation Bank on that site.
On or about February 18, 2003, counsel for Hartz Mountain filed a "Bid Protest And Request For Hearing," protesting the RFP process and the NJSEA's selection of Mills/Mack-Cali as its designated developer. Hartz Mountain again requested specified records it contended were public.
Through counsel's letter dated March 7, 2003, the NJSEA granted the request of Hartz Mountain for a hearing, "consistent with the reasoning set forth in Commercial Cleaning Corp. v. Sullivan, 47 N.J. 539 (1966)[,]" stating that the grant of a hearing would not be considered a contested case subject to the requirements of the Administrative Procedure Act, N.J.S.A. 52:14B-1 to -21. The NJSEA designated Arthur Winkler, Esq., Senior Vice President, Legal and Governmental Affairs of the NJSEA, as the hearing officer. The March 7 letter also stated that "[d]ocuments will be available for inspection in response to the Initial Document Demand beginning on March 17, 2003." Westfield also requested, and was granted, a bid-protest hearing.
Subsequently, disputes arose between Hartz Mountain, Westfield, and the NJSEA concerning the scope and conduct of the bid-protest hearing, and regarding those documents that were subject to release and inspection pursuant to the OPRA. Also, Braha, a local businessman who owned and operated Lords Department Store in Jersey City, contended that he should be permitted to participate in the bid-protest hearing. Hartz Mountain, Westfield and Braha all filed actions in the Law Division, Bergen County, against the NJSEA, the Mills Corporation and Mack-Cali Realty Corporation.
On April 10, 2003, the NJSEA moved to dismiss these complaints or, alternatively, to transfer the allegations raised therein to this court.
Meanwhile, Mr. Winkler scheduled the bid protest hearing for June 10, 2003.
The Law Division then dismissed the actions as either premature or improperly filed because the NJSEA is a state agency, any legal issues not subject to exhaustion must be brought directly in this court. Appeals were filed from these dismissals.
The first bid-protest hearing was held before Mr. Winkler on June 10 and 11, 2003. On August 5, 2003, Mr. Winkler issued a 94-page Report and Recommendation, addressing and rejecting the bid-protest claims advanced by Hartz Mountain and Westfield.
On August 19, 2003, Hartz filed exceptions to the Winkler report with the NJSEA. On September 10, 2003, the Board of Commissioners of the NJSEA adopted Resolution 2003-26, incorporating the August 5, 2003 Report and Recommendation issued by Mr. Winkler, and rejecting the bid protests.
In the meantime, Mills/Mack-Cali filed a motion seeking an order dismissing Braha's complaint.
Following the adoption by the NJSEA Board of Resolution 2003-26 on September 10, 2003, there ensued negotiations between the NJSEA and Mills/Mack-Cali for a developer's agreement. On October 23, 2003, Hartz Mountain filed a notice of appeal from the NJSEA Board's adoption of Resolution 2003-26, docketed as A-1169-03T3. On October 24, 2003, Braha also filed a notice of appeal from the adoption of that resolution, docketed as A-1218-03T3. On October 27, 2003, Westfield filed its notice of appeal from the adoption of Resolution 2003-26, docketed as A-1243-03T3.
On December 3, 2003, the Board of Commissioners of the NJSEA adopted Resolution 2003-34, authorizing the President and Chief Executive Officer of the NJSEA to execute a Redevelopment Agreement "with the Mills Corporation and Mack-Cali Realty Corporation for the development of Meadowlands Xanadu at the Continental Airlines Arena site" in the form reviewed and approved at the regular Board Meeting held on November 26, 2003. Pursuant to that authorization, the Redevelopment Agreement for the "Development and Construction of a Mixed-Use Redevelopment Project at the Meadowlands Sports Complex" was executed between the NJSEA and Meadowlands Mills/Mack-Cali Limited Partnership, effective December 3, 2003.
On January 13, 2004, Hartz Mountain filed a notice of appeal, docketed as A-2657-03T3, from the adoption by the NJSEA of Resolution 2003-34, which had authorized execution of the Redevelopment Agreement with Mills/Mack-Cali. On January 16, 2004, Westfield also filed a notice of appeal from the adoption of Resolution 2003-34, docketed as A-2734-03T3.
Additional requests were made to the NJSEA by Hartz Mountain and Westfield for documents they believed should be released under the OPRA. On application by Hartz Mountain to this court in docket number A-2657-03T3, filed on February 26, 2004, we issued an order on March 18, 2004, concluding "that all issues relating to the content of the administrative record and [Hartz Mountain's] right of access to documents as well as the Open Public Meetings Act issues should be decided before the administrative action is addressed in order for all parties to know what the record consists of and to avoid the need for supplemental briefing." We also severed docket number A-2657-03T3 from the pending appeal in docket number A-5255-02, and scheduled the matter for oral argument. We decided a portion of that appeal in Hartz Mountain Indus., Inc. v. New Jersey Sports and Exposition Auth. (Hartz I), 369 N.J. Super. 175 (App. Div.), certif. denied, 182 N.J. 147 (2004). Thereafter, we addressed "the global issue of document access" under the OPRA in three of eight appeals then pending that had arisen from the award of the redevelopment proposal and contract to Mills/Mack-Cali. Id. at 179-80.
In addressing the OPRA issues in light of the Law Division's dismissal of Hartz Mountain's complaint, we ruled that "it is the Law Division rather than the Appellate Division which, as a matter of cognizability and allocation of the court's business, should initially entertain the OPRA application." Id. at 182. We also required certain due process in any new or supplemental hearing following production of documents if so ordered by the Law Division. We remanded those issues to the Law Division.
After conducting remand proceedings concerning the OPMA issues, the Law Division judge reviewed 258 documents at issue under the OPRA requests made by appellants, and ruled that 155 additional documents must be released to appellants, and that 103 documents sought could be withheld by the NJSEA.
Pursuant to N.J.S.A. 5:10-5(x) and N.J.S.A. 5:10-23, the NJSEA consulted with the NJMC and the NJDEP concerning the proposed redevelopment project at the Continental Airlines Arena site. In accordance with the procedures outlined in New Jersey Sports and Exposition Auth. v. McCrane, 61 N.J. 1, 32-33 (1972 (1972), those agencies appointed a presiding officer and hearing officers, who then conducted public hearings "pertaining to the mixed use development proposal consisting of entertainment, retail, office, hotel and sports uses[,]" between April 26 and April 30, 2004. A "Hearing Officers' Report and Recommendations" was issued by the Presiding Officer and Hearing Officers on August 19, 2004. The NJMC also conducted three public hearing sessions on August 9, 2004, "to accept public comments regarding the location, type, and character of the proposed Meadowlands Xanadu Redevelopment Project at the Continental Arena Site[.]" On August 19, 2004, the Executive Director of the NJMC issued a "Consultation Report and Recommendations" to the Commission concerning that project, finding, inter alia, that the project was consistent with the NJSEA's enabling legislation. On August 26, 2004, the NJMC passed a Resolution adopting the findings and recommended requirements contained in the Hearing Officers' report, which recommended that the "Meadowlands Xanadu redevelopment . . . project may advance subject to the conditions and recommendations" contained in the report. On October 1, 2004, the Commissioner of the NJDEP issued an order concerning the consultation process established for review of the Xanadu Redevelopment Project, "adopting and revising the Hearing Officers' Report and Recommendations, while setting forth additional provisions to ensure compliance with, and enforcement of, the terms and requirements of the Report."
Meanwhile, by letter to counsel for appellants dated August 16, 2004, Mr. Winkler explained that he had been designated by the NJSEA to conduct the supplemental bid-protest hearing, outlined the procedures to be followed, and requested their availability for such a hearing during the weeks of September 7 and 13, 2004. Counsel for appellants objected to the proposed scheduling of the supplemental hearing on numerous grounds, including the fact that the Law Division had not yet ruled on the OPRA documents issues. However, upon issuance of the Law Division's August 19, 2004 decision, Mr. Winkler scheduled the supplemental hearing for September 13, 2004, and then rescheduled it for September 27, 2004.
On September 20, 2004, Hartz Mountain filed an emergent application with this court, seeking a stay of the supplemental bid-protest hearing. On September 23, 2004, we issued an order granting a stay of the scheduled September 27, 2004 hearing; granting leave to appeal from the Law Division's determination of the OPRA issues; and accelerating the appeal. On November 24, 2004, we issued an unreported opinion in Hartz Mountain Indus., Inc. v. New Jersey Sports and Exposition Auth., (Hartz II) A-0088-04T3 (Nov. 24, 2004), certif. denied, 183 N.J. 214 (2005), affirming the Law Division's August 24, 2004 order concerning its OPRA determinations.
While this appeal was pending, the NJSEA Board adopted Resolution 2004-36 on October 4, 2004, which directed the officers and managers of the NJSEA "to consider carefully each of the findings and recommendations in the Hearing Officers' Report and Recommendations . . . to determine the extent to which they can (or cannot) be implemented[;]" authorized "the President and Chief Executive Officer . . . to execute and deliver" the "First Amendment to Redevelopment Agreement[;]" authorized execution of the "Master Ground Lease" between Mills/Mack-Cali and the NJSEA; authorized execution of the "WMB Agreement," the NJSEA's agreement to pay $28,600,000 for the release of the rights of Mills/Mack-Cali "under the Redevelopment Agreement related to the establishment of a Wetlands Mitigation Bank in order to facilitate the transfer of all or a portion of that certain parcel of land commonly known as the Empire Tract to the Meadowlands Conservation Trust[;]" authorized execution of the "PILOT Addendum" for the payment to "the Borough of East Rutherford of an increased Payment in Lieu of Taxes in connection with the redevelopment of the Arena site[;]" and approved the "Supplementary Report and Recommendation Concerning the Master Plan for the Meadowlands Project" dated October 4, 2004, setting forth certain conclusions and recommendations concerning conditions of the "Approved Master Plan" for the redevelopment project adopted by the NJSEA Board on September 8, 2004.
In adopting Resolution 2004-36, the NJSEA Board made the following findings, in pertinent part:
1. The mix of tenants and uses that Developer proposes for the redevelopment project is consistent with the Authority's original intent in soliciting redevelopment proposals for the Arena Site, and is consistent with the Redevelopment Agreement and Approved Master Plan.
2. The uses proposed by Developer, including, but not limited to, the office, hotel, sports, entertainment, dining and retail uses, are all related to, incidental to, necessary for and/or complimentary to the Meadowlands Sports Complex (the "Complex") as a whole[.] . . .
3. The Authority approves the master Ground Lease in the exercise of its discretionary powers under N.J.S.A. 5:10-6(a)(1), . . . and N.J.S.A. 5:10-21.3(g)[.] . . .
4. The Authority has reviewed the Master Ground Lease and other matters presented by Developer to evaluate whether the retail uses of the project are "primary or ancillary to the Meadowlands development" as a whole, . . . and concludes that the retail uses are ancillary. . . .
5. The Authority finds that the Master Ground Lease is consistent with and in furtherance of the Authority's purposes in initiating a competitive search for redevelopment proposals in June 2002, and in selecting Mills/Mack-Cali to be the redeveloper of the Arena Site.
On November 18, 2004, Hartz Mountain filed a notice of appeal, docketed as A-1433-04T3, from the NJSEA's adoption of Resolution 2004-36. On November 19, 2004, Westfield also filed a notice of appeal, docketed as A-1451-04T3, from the adoption of Resolution 2004-36.
Thereafter, by letter dated November 29, 2004, Mr. Winkler scheduled the supplemental bid-protest hearing for December 13, 2004, and then rescheduled it for December 15, 2004. The parties filed and exchanged pre-hearing submissions, and the supplemental bid-protest hearing was conducted before Mr. Winkler on December 15 and 16, 2004.
At the outset of the supplemental hearing, Mr. Winkler noted, "I have with me my counsel today, Tim O'Neill, from the law firm of Windels, Marx, Lane and Mittendorf." Later in the hearing, when asked about unknown persons in the hearing room, Mr. Winkler identified that a Mr. Fisher, also of Windels, Marx, was "a member of the law firm that represents the [NJSEA] and he's present at the hearing and he's not at the counsel's table" and he was not designated as a spokesperson for the hearing.
Mr. Winkler reviewed the procedural history leading up to the supplemental hearing, and added that the participants previously had been advised as to how the hearings would proceed, stating:
These hearings are informal. The rules of evidence do not apply. There will be no witnesses, per se, only spokespersons. No oath will be required of the spokespersons. As the hearing officer, I may elect to ask questions of any spokesperson. However, there will be no cross-examination by the parties.
Winkler noted that "[a]s an interested party whose participation may assist me," Mills/Mack-Cali was permitted to attend and to make a presentation. Mr. Winkler stated that an NJSEA representative might also be permitted to make a presentation if he determined it would be helpful.
Hartz Mountain's counsel made an initial presentation, stating his intent to honor Mr. Winkler's admonition to try to streamline the proceedings, and therefore expressly reserved all issues that remained pending with the Appellate Division and Supreme Court as a result of the initial hearing. Counsel then set forth Hartz Mountain's reasons as to why it was asking Winkler to recuse himself; Winkler declined.
Hartz Mountain presented Mark Leonard, an attorney, who gave a detailed analysis of the eight-year long pre-RFP relationship between Mills/Mack-Cali and the NJSEA and of the RFP process, arguing that the NJSEA had shown favoritism to Mills/Mack-Cali. Mr. Leonard referenced documents and correspondence in the record that pertained to Mills' effort to develop its adjoining Empire Tract and the positions taken by the NJSEA with respect thereto as well as the Authority's 1994 and 1999 Master Plans for development and earlier proposals for execution of those plans, including one from Mills. Mr. Leonard made particular note of historical correspondence that raised issues similar to those raised by Hartz, Westfield, and Braha here.
Mr. Leonard also described legislative efforts to enact Senate Bill 1272, entitled the "Sports and Entertainment District Financing Act." As Mr. Leonard described it, that bill would have amended the NJSEA's enabling act and sought to "bulletproof Xanadu Meadowlands Mills-type development on the Continental Arena." Among other things, that bill would have provided for: (1) authorizing the NJSEA to enter contracts without complying with public bidding laws (section 15); (2) authorizing the NJSEA to enter into long-term leases (section 16); (3) allowing the NJSEA's contractors to have a five-year exemption from property taxes (section 17); (4) funding a commuter rail line serving the Meadowlands site and for a realignment of Route 129 from the Transportation Trust Fund (which Leonard estimated would cost $300 million) (section 35); (5) amending N.J.S.A. 5:10-6(a)(1) so that it would expressly include family entertainment facilities and commercial facilities that included retail, hotel or office space as authorized projects at the Meadowlands (section 36); (6) further amending N.J.S.A. 5:10-6(a) to add a new subsection 13 authorizing the NJSEA to acquire, operate, maintain, restore and preserve wetlands areas within or adjacent to the Meadowlands Sports Complex (which Leonard viewed as directly geared toward the Empire Tract) (section 36); and (7) further amending N.J.S.A. 5:10-6(a) to add a new subsection 14, authorizing the NJSEA to develop and operate a "sports and entertainment facility" in a "sports and entertainment district" as those terms are defined in section 3 of the bill (section 36).
Mr. Leonard summarized all of the evidence he discussed by saying it represented an eight-year process for Mills, culminating in an RFP process that "was just about checking a box. It was always about moving the Meadowlands Mills from the Empire Tract to the Continental Arena" and the NJSEA "was so desperate to conclude a deal with the Mills that it refused to let the stakeholders vote on the proposals" despite its original plans to have the Stakeholders Committee do so.
Hartz Mountain next presented Larry Carlson of Carlson and Associates, a consulting firm with over thirty years of experience in the shopping center and retail development business, which had worked with Hartz Mountain on its competing bid for the Arena site. Hartz Mountain offered Mr. Carlson as an expert in the area of retail development. In his 2003 report analyzing the Xanadu development proposal, Mr. Carlson concluded that Xanadu had failed to materially conform to the August 29, 2002 addendum to the RFP in which the NJSEA had stated that it "discourages proposals that are solely or significantly retail." Mr. Carlson further concluded that the Xanadu proposal materially failed to conform to the RFP provision discouraging proposals that materially compete with existing businesses in the Meadowlands district.
Based on supplemental materials he had received after preparing that report, Mr. Carlson concluded that the Xanadu project would contain 4.96 million square feet of gross building area on 100 acres, with 2.7 million square feet comprised of an entertainment and retail complex and the remainder comprised of office and hotel space, the existing arena, and possibly a minor league baseball stadium. The entertainment and retail component would include 1.5 million square feet of participatory sports, entertainment, children's education, and "home and life activities," with another 700,000 square feet related to fashion and 500,000 square feet of common area. Mr. Carlson noted that two industry groups the International Council of Shopping Centers (ISC) and the Urban Land Institute (ULI) each classified a "super-regional shopping center" as one with at least 800,000 square feet of gross leasable area including "general merchandise and services in full depth and variety."
Based on his review of drawings obtained from the NJSEA, Mr. Carlson stated that the Xanadu project would devote at least 1.2 million square feet to primarily retail tenants, including 550,000 to 600,000 square feet of department store space. Ninety-one percent of the tenant base would be "primarily retail orientation." Even adopting Mills' characterization of certain anchor space as entertainment-based, Mr. Carlson concluded that "55% of this shopping center portion of the Meadowlands redevelopment will be primarily retail." He noted that only the Garden State Plaza, with 1.9 million square feet, and Willowbrook Mall, with 1.5 million square feet, offered more square footage of gross leasing area (GLA) to the New Jersey consumer.
In Mr. Carlson's opinion, "it is clear that this center will be a substantial competitive threat to the traditional regional centers within the 15-mile radius of the Meadowlands Xanadu, even more so than what it would have anticipated" as the plans had been set forth a year-and-a-half earlier.
Mr. Carlson stated that Xanadu's plans for a 30-screen movie theater would be among the largest, if not the largest in the country, and Mr. Carlson concluded that this would "significantly impact existing theaters within three miles of this site," including one in North Bergen, two in Secaucus, and one in Clifton.
Hartz Mountain then presented Michael Maris of Michael Maris Associates as its spokesperson on traffic issues. Mr. Maris spoke of shortcomings in the scope of Mills/Mack-Cali's traffic studies and in the estimates produced. He noted particularly that Mills/Mack-Cali's traffic analysis focused only on Route 120, the only roadway in the region that did not regularly experience congestion; he thought it imperative that additional traffic studies were needed as to the other roadways that were regularly congested, including Routes 3 and 17 and Paterson Plank Road.
Allen Magrini, Esq., an attorney with Horowitz, Rubino and Patton, who was also a licensed professional planner, noted Mr. Maris' reference to a November 3, 2003 letter from the DOT Commissioner, a copy of which was appended to Mr. Maris' report. That letter indicated $100 million would be needed for state roadway improvements to accommodate the Xanadu development, and that the DOT expected the NJSEA to provide $65 million of that amount, and the DOT would cover the other $35 million. Mr. Magrini wanted to make it clear that the $65 million that Mills/Mack-Cali had agreed to pay for transportation and infrastructure costs would not cover the $65 million amount that the DOT Commissioner had referenced. Mr. Magrini asserted that the Developer's Agreement permitted that from the $65 million, Mills/Mack-Cali would devote $34.2 million to on-site improvements, including the arena road network, storm and sanitary sewers, water, gas, electric, and telecommunications. Accordingly, asserted Mr. Magrini, the NJSEA still would be required to fund most of the state roadway improvements necessitated by the Xanadu project.
Peter Steck, a licensed professional planner, had submitted a report at the first bid-protest hearing and presented a supplementary report at the supplemental hearing. He talked about the land use concept of accessory uses, which he related to the term "appurtenances" in the NJSEA enabling statute. Mr. Steck referenced the Meadowlands Commission's regulatory definition of "accessory use," which means "a use which is customarily subordinate and incidental to a principal use in area, extent or purpose and which contributes to the comfort, convenience, or necessity of occupants, business, or industry in the principal use served." (quoting N.J.A.C. 19:4-2.2).
Mr. Steck noted numerous "classic retailers" that were listed as Xanadu tenants, including many that were "found in any traditional shopping center" and were "already present in the region" including Pottery Barn, Johnson and Murphy, Yankee Candle, and Smith and Hawkin. Mr. Steck stated he was "hard pressed" to say that these retailers would "fit under some kind of sports and exposition heading"; rather, "[t]heir business is selling products." Mr. Steck also explained that recent trends in mall retailing had led developers to add entertainment-oriented retailers to extend visitors' length of stay and extract greater per capita spending from those visitors.
John Buttarazzi of J.H. Cohn Real Estate Associates was Hartz's spokesperson regarding the financial terms of the Xanadu proposal. Mr. Buttarazzi took figures from Mills/Mack-Cali's documents and calculated that, in order to justify the $65-per-square-foot base rents that Mills/Mack-Cali would have to charge its tenants, a retailer would need sales in the range of $650 per square foot, an amount well above the regional average. He stated this would negatively impact regional malls, and contribute to an oversupply of retail space in the region. He opined that Mills/Mack-Cali also may find it difficult to charge those desired high rents, which "will have a profound effect on the project's already questionable financial viability."
James F. Dausch, President of The Mills Corporation's Development Division, presented testimony as to the nature and identity of the various planned Xanadu entertainment tenants, including the indoor ski facility, indoor skydiving facility, bowling, indoor fishing, a Muvico "luxury" movie palace that serves dinner during the show, roller rink, and Wannado kid city, a child-sized real-life city. Mr. Dausch predicted that visitors to Xanadu would come from up to a 100-mile radius from the site. Mr. Dausch had worked on the Meadowlands Mills proposal for the Empire Tract, and explained that it was very different from the Xanadu proposal, particularly as to the entertainment items. Mr. Dausch noted that Mills/Mack-Cali also had plans to announce an additional $15 million contribution to regional transportation.
At the end of Mr. Dausch's testimony, Mr. Winkler asked, "as it's planned now how many square feet of Meadowlands Xanadu will be retail?" Mr. Dausch responded:
There's likely to be 600,000 square feet of traditional retail. I think you can be fairly sure there will be that. Then on the charts you can see what we have now will be entertainment-related retail and I can't give you the exact number, but you can add it up. And . . . some of that undetermined space is likely to be either entertainment or entertainment-related retail, but it is really impossible to say exactly how much that's going to be at this point until we've been out leasing a lot longer than we are now.
* * * *
I think we probably in this presentation overdid the traditional retail because we assumed that all of the retail in the food and home area was traditional, which I think as time goes on will probably not be the case. You might find what you might consider a traditional retail store in one of those other districts, but I think we're likely to see some more entertainment-related retail or even entertainment in the food and home area. We haven't concentrated there.
Mills/Mack-Cali also presented testimony by Michael Buckley, a consultant with Halcyon, Limited, who specialized in joint public-private developments and mixed use development planning. In Mr. Buckley's opinion, Xanadu was best characterized as a "mixed-use development and as a location-based entertainment development and not as a regional mall." He believed that the Xanadu project would "build on the existing Meadowlands uses, but offer new and expanded uses that will be attractions and leisure functions that will be unique to this region" and would draw visitors from as far as Boston and Washington. He found it significant that the Xanadu project would emphasize other sports that the Meadowlands could not currently present, namely the "extreme sports" including skydiving, snowboarding, skateboarding, and mountain climbing. Mr. Buckley added that the "collateral value of the adjoining sites will be increased substantially."
On March 4, 2005, Winkler issued a 98-page Supplemental Report and Recommendation, concluding once again that the Hartz Mountain and Westfield bid protests were without merit. The parties filed exceptions. On March 16, 2005, NJSEA's Board passed Resolution 2005-7, empowering the Chairman and President and Chief Executive Officer of the NJSEA to authorize the commencement of Phase I of the construction of the project pursuant to the Redevelopment Agreement. On March 30, 2005, the Board passed Resolution 2005-9, adopting the March 4, 2005 Supplemental Report and Recommendations issued by Winkler, and rejecting the bid protests. Also on March 30, 2005, the NJSEA Board passed Resolution 2005-10, rejecting the applications of Hartz Mountain, the Borough of Carlstadt and the New Jersey Builder Association for a stay of the commencement of construction of the Meadowlands Xanadu project.
On March 29, 2005, we rejected Hartz Mountain's emergent application for injunctive relief stopping the construction, stating it did not meet the criteria for being considered on an emergent basis, and directing that counsel was free to file a motion seeking relief in the normal course.
On April 6, 2005, Hartz Mountain filed a notice of appeal, docketed as A-3830-04T3, from the adoption by the NJSEA of Resolution 2005-9, rejecting its bid protest, and from the NJSEA's adoption of Resolution 2005-10, denying the request of Hartz Mountain for a stay of the construction of the Xanadu project pending appeal. On April 6, 2005, Hartz Mountain also filed a formal motion in this court seeking injunctive relief precluding the NJSEA from proceeding with the project. On May 5, 2005, we entered an order denying that motion.
On April 27, 2005, Braha filed a notice of appeal, docketed as A-4394-04T3, challenging the adoption by the NJSEA of Resolution 2005-09 that adopted the supplemental report and recommendation issued by Winkler. On May 19, 2005, we issued an order in A-4394-04T3, denying the motion of Braha seeking injunctive relief with respect to the construction of the Xanadu project.
On August 29, 2005, we entered an order consolidating under docket number A-1169-03T3 the appeals pending in docket numbers A-1218-03T3, A-1243-03T3, A-2657-03T3, A-2734-03T3, A-1433-04T3, A-1451-04T3, A-3830-04T3, and A-4394-04T3. In that order, we also denied the applications of Hartz Mountain to supplement the record and to compel respondents to produce certain records.
On appeal, Hartz Mountain presents the following arguments for our consideration:
POINT I
THE LEGISLATURE DID NOT EMPOWER NJSEA WITH THE STATUTORY AUTHORITY TO DEVELOP XANADU'S SIGNIFICANT RETAIL FACILITIES.
POINT II
THE NJSEA'S RFP PROCESS FAILED TO PROCEED WITHOUT EITHER THE ACTUALITY OR APPEARANCE OF FRAUD, CORRUPTION, FAVORITISM, OR EXTRAVAGANCE, AND FAILED TO PROVIDE FULL AND FREE COMPETITION.
POINT III
THE NJSEA'S SELECTION OF MILLS' XANADU PROPOSAL CONSTITUTES A GROSS ABUSE OF AGENCY DISCRETION.
POINT IV
THE PROCEDURALLY INADEQUATE BID PROTEST HEARING VIOLATED DUE PROCESS.
POINT V
THE NJSEA'S CHIEF LEGAL OFFICER CANNOT SERVE AS AN IMPARTIAL HEARING OFFICER.
On appeal, Westfield advances the following arguments for our consideration:
POINT I
THE AUTHORITY IMPROPERLY WAIVED MATERIAL NONCONFORMITIES IN THE MILLS PROPOSAL, THEREBY COMPROMISING THE INTEGRITY OF THE RFP PROCESS AND CONTRAVENING PUBLIC POLICIES OF COMPETITIVE BIDDING.
POINT II
THE PROCEDURES EMPLOYED BY THE NJSEA DEPRIVED WESTFIELD OF DUE PROCESS OF LAW.
POINT III
SELECTION OF THE MILLS PROPOSAL CONSTITUTED AN ABUSE OF DISCRETION.
In their appeal from the final administrative decisions of the NJSEA, Braha presents the following arguments for our consideration:
POINT I
BRAHA HAS ERRONEOUSLY BEEN DENIED A FORUM AND HAS NEVER BEEN PERMITTED TO LITIGATE HIS CASE AND LEGAL ISSUES.
POINT II
THE NJSEA'S SELECTION OF MILLS WAS ULTRA VIRES AND VOID DUE TO THE CONTEMPLATED RETAIL COMPONENT.
POINT III
MILLS'S DEVELOPMENT OF THE ARENA SITE IS NOT TAX EXEMPT AND THE PILOT PAYMENT PROGRAM VIOLATES THE NEW JERSEY CONSTITUTION AND THE NJSEA'S ENABLING STATUTE.
POINT IV
THE NJSEA IMPROPERLY CREATED A SCENARIO THAT ENSURED THAT MILLS WOULD BE SELECTED TO REDEVELOP THE ARENA SITE.
POINT V
THE NJSEA EXCEEDED ITS STATUTORY AUTHORITY BY OBTAINING LIQUOR LICENSES FOR MILLS'S TENANTS.
In their appeals from the final decisions issued by the law Division, Braha presents the following arguments:
POINT I
PLAINTIFF BRAHA HAD NO ABILITY OR RIGHT TO PARTICIPATE IN THE BID HEARING; HE THEREFORE CANNOT BE BOUND BY THE TRIAL COURT'S DECISION IN THE HARTZ MATTER TO EXHAUST ADMINISTRATIVE REMEDIES; PRINCIPLES OF RES JUDICATA DID NOT PROHIBIT HIS SECOND FILED COMPLAINT IN THE LAW DIVISION.
POINT II
THE NEW JERSEY SPORTS AND [EXPOSITION] AUTHORITY IS NOT A STATE AGENCY; REVIEW OF ITS ACTION WAS PROPERLY IN THE LAW DIVISION; THE TRIAL COURT ERRED BY DISMISSING HARTZ'S COMPLAINT (AND ACCOMPANYING BRAHA INTERVENING CLAIM) AND BRAHA'S SECOND COMPLAINT.
POINT III
AT THE VERY LEAST, BRAHA'S CHALLENGE TO THE CONSTITUTIONALITY OF THE PAYMENT IN LIEU OF TAXES ("PILOT") PAYMENTS WAS PROPERLY COGNIZABLE IN THE LAW DIVISION; IT IS A RIPE AND JUSTICIABLE ISSUE THAT SHOULD BE HEARD IN THE LAW DIVISION.
POINT IV
THE RFP WAS ULTRA VIRES AND VOID IN MANY RESPECTS PARTICULARLY AS TO THE PILOT PAYMENTS PROGRAM, THE CONTEMPLATED RETAIL COMPONENT AND EXCLUSION OF THE ARENA SITE IN THE FINAL DEVELOPERS' AGREEMENT.
POINT V
CLASS ACTION CERTIFICATION SHOULD BE GRANTED TO BRAHA'S CLAIM.
There is also one reserved or unadjudicated motion. In A-1169-03T3, Hartz Mountain filed a motion, M-2577-04, on January 11, 2006, seeking reconsideration of an order entered on December 23, 2005, in M-1623-05, denying its motion to supplement the record and compel production of certain documentation by the NJSEA.
II.
Hartz Mountain and Braha assert that the decision to approve the Xanadu redevelopment plan exceeded the NJSEA's statutory authority in three ways: (1) by including excessive amounts of retail; (2) by permitting material competition with local businesses after the RFP stated that avoiding such competition would be a goal; and (3) by arranging for liquor licenses for Xanadu concessionaires.
A. The NJSEA's Authority Regarding Retail Uses.
Hartz Mountain contends that a threshold issue in its appeal is whether Xanadu's retail facilities are "related to, incidental to, necessary for, or complementary to" the sports and exposition uses authorized under NJSEA's statutory authority for the Meadowlands. It argues that the Xanadu project is primarily a project for retail uses, that NJSEA and Mills/Mack-Cali each have made prior admissions that retail facilities could not be built on the site, and that Xanadu's significant retail facilities are not permitted under NJSEA's enabling statutes. Hartz Mountain further asserts that the 1971 removal of the Meadowlands Sports Complex acreage from the Hackensack Meadowlands District Commission's jurisdiction signaled the Legislature's intent that the NJSEA was not authorized to pursue retail development, and was not free to expand its statutory authority.
"A strong presumption of reasonableness accompanies an administrative agency's exercise of statutorily-delegated responsibility." Gloucester County Welfare Bd. v. State Civil Serv. Comm'n, 93 N.J. 384, 390 (1983). "[T]he burden of proving unreasonableness falls upon those who challenge the validity of the action." Smith v. Ricci, 89 N.J. 514, 525, appeal dismissed, 459 U.S. 962, 103 S. Ct. 286, 74 L. Ed. 2d 272 (1982). In determining whether an administrative act enjoys statutory authorization, the reviewing court may look beyond the enabling act's specific terms "to the statutory policy sought to be achieved by examining the entire statute in light of its surroundings and objectives." Department of Labor v. Titan Constr. Co., 102 N.J. 1, 10-11 (1985). From this inquiry, courts can ascertain whether the requisite authority has been implicitly supplied, because "courts should readily imply such incidental powers as are necessary to effectuate fully the legislative intent." Id. at 11 (quoting New Jersey Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 562 (1978)).
The "furtherance of legislative purpose is the key to the interpretation of any statute." GE Solid State, Inc. v. Dir., Div. of Taxation, 132 N.J. 298, 308 (1993). Generally, courts "accord substantial deference to the interpretation an agency gives to a statute that the agency is charged with enforcing." Id. at 306. "Nevertheless, an administrative agency may not, under the guise of interpretation, extend a statute to give it a greater effect than its language permits." Ibid.
The NJSEA's enabling legislation includes extensive provisions regarding its authority to engage in projects to carry out the public purposes of the act, including the power to "establish, develop, construct, operate, acquire, own, manage, promote, maintain, repair, reconstruct, restore, improve and otherwise effectuate, either directly or indirectly through lessees, licensees or agents, a project to be located in the Hackensack meadowlands"
consisting of one or more stadiums, coliseums, arenas, pavilions, stands, field houses, playing fields, recreation centers, courts, gymnasiums, clubhouses, a racetrack for the holding of horse race meetings, and other buildings, structures, facilities, properties and appurtenances related to, incidental to, necessary for, or complementary to a complex suitable for the holding of athletic contests or other sporting events, or trade shows, exhibitions, spectacles, public meetings, entertainment events or other expositions, including, but not limited to, driveways, roads, approaches, parking areas, parks, recreation areas, lodging facilities, vending facilities, restaurants, transportation structures, systems and facilities, and equipment, furnishings, and all other structures and appurtenant facilities, related to, incidental to, necessary for, or complementary to the purposes of that project or any facility thereof.
[N.J.S.A. 5:10-6(a)(1) (emphasis added).]
Other paragraphs authorize activity on projects related to baseball stadiums, aquariums, an exposition center or entertainment center, racetrack facilities, leases with professional sports leagues, Rutgers University's football stadium and certain of its other sports facilities, the Atlantic City Convention Hall, the Asbury Park convention center or recreation facility, funding for public or private institutions of higher education for sports facilities, and the Wildwood Convention Center. N.J.S.A. 5:10-6(a)(2)-(12).
N.J.S.A. 5:10-26 provides that the Sports and Exposition Authority Law
shall be construed liberally to effectuate the legislative intent and the purposes of the act as complete and independent authority for the performance of each and every act and thing herein authorized and all powers herein granted shall be broadly interpreted to effectuate such intent and purposes and not as a limitation of powers.
In Hartz I, supra, we have already concluded that, reading these powers broadly, the NJSEA possesses the authority to include some retail in its development plans for the Meadowlands Sports Complex. 369 N.J. Super. at 191. The question now presented is whether the extent of the retail in the Xanadu proposal exceeds that authority and undermines the sports and exposition goals of the enabling statute. We conclude that it does not.
Notably, the enabling statute did not seek to quantify the permissible amount of "other buildings, structures, facilities, properties and appurtenances related to, incidental to, necessary for, or complementary to" a complex for sporting events, trade shows, exhibitions, spectacles, public meetings, entertainment events or other expositions. Clearly, what may be "related," "incidental," "necessary," or "complementary" could change over time.
Here, there is ample support in the record for Winkler's finding that the retail facilities proposed for the Xanadu project are "related to, incidental to, necessary for, or complementary to" the sports and exposition uses permitted under the NJSEA enabling act. N.J.S.A. 5:10-6(a)(1). As Winkler pointed out in his First Report and Recommendation dated August 5, 2003, the Authority's 1998 Master Plan envisioned retail uses in the complex. Winkler noted that Mills/Mack-Cali, Hartz Mountain and Westfield had included retail in their proposals and the claim that the NJSEA lacked authority to include retail in the Arena site redevelopment "rang hollow."
Moreover, in his Supplemental Report and Recommendation dated March 4, 2005, Winkler made detailed findings and rejected the assertion that the award of the development agreement to Mills/Mack-Cali was ultra vires because of the amount and character of the retail proposed for the Xanadu project. Winkler noted that Dausch's testimony indicated that Xanadu would contain 600,000 square feet of traditional retail space and 274,000 square feet of entertainment-related retail space. Although Hartz Mountain had argued that there could be as much as 1,333,000 square feet of retail at Xanadu, that analysis was flawed because it included 194,000 square feet of space for "restaurant/food" and 265,000 square feet of "undetermined" space. Winkler properly concluded that the former was not "retail," and there was no basis to conclude that all of the "undetermined" space would be retail.
Winkler reviewed the relevant evidence and determined that the retail uses proposed for Xanadu will support and complement the sports and entertainment uses, "which will still predominate at the Sport's Complex." He found that there will be a "functional relationship between the proposed retail and the sports and entertainment currently existing as well as that planned as part of Xanadu." Winkler rejected the assertion that the proposed retail uses would transform the complex from one devoted primarily to sports and entertainment to one that was a "primarily retail destination." Moreover, "simple math" indicated that the proposed retail at Xanadu would be ancillary to the sports and entertainment facilities at the Sports Complex. Even accepting Hartz Mountain's assertion that there could be 1.2 million square feet of retain in the Xanadu project, this would only amount to 22.9% of the Xanadu development and only 12% of the entire Sports Complex. Winkler found that this amount of retail would "not disturb the essential character of the Sports Complex as a mecca for sports and entertainment." The record clearly supports these findings, as well as the Board's conclusion that the "retail uses of Meadowlands Xanadu are plainly ancillary to that project as well as the Complex itself."
Moreover, the enabling statute includes authority for "transportation structures, systems and facilities, and equipment, furnishings, and all other structures and appurtenant facilities, related to, incidental to, necessary for, or complementary to the purposes of that project or any facility thereof." N.J.S.A. 5:10-6(a)(1). The record discloses that the NJSEA has stated a strong desire to bring mass transit to the site as an important part of improving the value of the Meadowlands Sports Complex as a site for large-scale sporting events. The NJSEA also has concluded that a good mix of land uses that will bring visitors daily is necessary to justify public transportation investments in the site, whereas the occasional large-scale events at the site's venues have failed to make the goal achievable to date. Beyond these transportation-related issues, the NJSEA expressly found, in Resolution 2004-36, that the Xanadu project, as a whole, would renew and expand public interest in, and desirability of, the site, while also injecting "new and needed" revenues for the Complex as a whole.
An appellate court may not second-guess judgments of the administrative agency that fall squarely within the agency's expertise, and we will only reverse a decision of an administrative agency if it is arbitrary, capricious, or unreasonable. Brady v. Board of Review, 152 N.J. 197, 210 (1997). We generally defer to an agency's expertise on technical matters within the agency's field of expertise. Campbell v. New Jersey Racing Comm'n, 169 N.J. 579, 588 (2001). "Thus, if substantial credible evidence supports an agency's conclusion, a court may not substitute its own judgment for the agency's even though the court might have reached a different result." Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992). "Agencies, however, have no superior ability to resolve purely legal questions, and that a court is not bound by an agency's determination of a legal issue is well established." Ibid.
Given the exercise of the NJSEA's sports and exposition facility expertise, the supportive testimony presented to the hearing officer, and the broad language used in the NJSEA's enabling statute, we cannot conclude that the NJSEA's statutory authority was exceeded by its approval of this development, even given the very significant amount of retail that the Xanadu project has. The NJSEA rationally explained its view that these significant retail uses were among the mix of uses needed to draw a steady flow of visitors to the Meadowlands site in order to boost the viability of Giants Stadium, the Meadowlands Racetrack, and any other sports or exhibition use on the site.
Braha argues that the NJSEA only viewed the statutory standard of "related to, incidental to, necessary for, or complementary to" the Meadowlands Sports Complex in terms of square feet of retail, and not in terms of time devoted to the uses, and that the limited-duration uses of the stadium, arena, and racetrack do not compare with the approximately fourteen-hours-a-day, six-or-seven-days-a-week anticipated for Xanadu. Braha asserts, therefore, that "Xanadu and its retail uses will dwarf and exceed the time spent on other uses at the Sports Complex."
However, stated this way, Braha's argument presumes that the entirety of the Xanadu project is retail. The NJSEA's view of Xanadu as supplying many new sports and entertainment venues in its own right, such as skiing, climbing, skating, bowling, music, and minor league baseball, demonstrates that Braha's argument is without merit. Moreover, creating uses with a more regular flow of patrons to the property, in order to justify bringing mass transit to enhance the site, is a rational component of the NJSEA's decision to support this development.
Our conclusion that the NJSEA did not exceed its statutory authority is not undermined by the Legislature's express mention of retail only in the statute regarding the Wildwood Convention Center, namely, N.J.S.A. 5:10-6(a)(12), adopted as L.1997, c. 273, 20, effective December 24, 1997. That amendment was drawn to describe a particular project, the plans for which already had received State and local approvals with a retail component included. There is no basis for concluding that this description of the Wildwood project was meant to limit the NJSEA's broad grant of authority, enacted years earlier, for the Meadowlands Sports Complex.
Similarly, failed legislative efforts to amend the NJSEA'a statutory authority, which would have specifically included permitting retail at the Meadowlands site, do not demonstrate that the issued RFP was ultra vires. First, any past practice to seek additional authority did not limit the breadth of the statutory authority originally granted. Second, the amendments to which Hartz referred were the Senate Committee Substitute for Senate Bill Number 1272 in 2001, Assembly Bill Number 364, proposed in 2002, and Assembly Bill Number 1438, proposed in 2004, all captioned the "Sports and Entertainment District Financing Act." Our review discloses that these bills were not aimed solely at whether the NJSEA's authority should extend to allowing retail uses at the Meadowlands; the bills would have established a State financial assistance program for qualified redevelopment plans for the Meadowlands region. The economic decisions involved in deciding whether or not to create such a State financing plan provide no guidance as to whether the Legislature believed that the NJSEA had, or should have, the authority to allow retail development in the Meadowlands.
Moreover, even if the proposed legislation had dealt directly with providing retail development at the Sports Complex, it is well established that little weight is given to the Legislature's failure to enact proposed legislation on a subject related to the statutory interpretation issue at hand. Jersey City Chapter of Prop. Owner's Protective Ass'n v. City Council of Jersey City, 55 N.J. 86, 95-96 (1969). Indeed, even if a new law had been enacted on the subject, it would give little guidance, because the legislators might "have thought the amendment would merely clarify and make more specific a right which already existed." Ibid. (quoting J. R. Christ Constr. Co. v. Willete Assocs., 47 N.J. 473, 480 (1966)). Notably, legislation was also proposed, but not passed, that would have forbidden retail uses at the Meadowlands Sports Complex, Senate Bill 2285; this proposed legislation also has no effect on the interpretation of the NJSEA's current authority.
Contrary to the arguments of Hartz Mountain and Braha, the NJSEA's authority is not undermined because, in seeking approval to build on the Empire Tract, Mills had previously taken the position that a significant retail development was impermissible on the Meadowlands Sports Center site. The NJSEA's decision and expertise regarding how to achieve its mandate is the issue here, not the consistency of Mills/Mack-Cali's position.
The doctrine of judicial estoppel, intended to prevent litigants from "playing fast and loose" with the courts by asserting a position in one judicial forum that is contrary to the position taken elsewhere, Country-Wide Ins. Co. v. Allstate Ins. Co., 336 N.J. Super. 484, 491-92 (App. Div.), certif. denied, 168 N.J. 293 (2001), is inapplicable. The issue here is one of statutory interpretation. Whether Mills/Mack-Cali took inconsistent positions on the meaning of the NJSEA's enabling statute is of no moment because we are required to interpret the statute in a manner consistent with its plain language and the Legislature's intent. Moreover, the record does not disclose that the NJSEA ever took any inconsistent position in court respecting its authority to include retail facilities in the Sports Complex. Thus, judicial estoppel has no application in this matter.
There is similarly no merit to Hartz Mountain's argument that the 1971 removal of the Meadowlands Sports Complex acreage from the Meadowlands Commission's jurisdiction precludes the Xanadu development. Hartz Mountain is correct in its view that the NJSEA does not share the same type of broad development powers as does the NJMC, which is authorized to pursue development projects that include "buildings and structures in renewal areas for industrial, commercial or residential use," among other uses. N.J.S.A. 13:17-3(n); 13:17-1. However, the NJSEA enabling act clearly permits the Authority to advance its sports and exposition goals with related retail development. As set forth above, the record before the NJSEA well supported its conclusion that the Xanadu proposal met those sports and exposition goals, and therefore was within its authority to approve.
B. Competition with Local Businesses
Hartz Mountain and Braha contend that, in deciding to develop significant retail facilities at the Meadowlands Sports Complex, the NJSEA violated its RFP language that "the development as a whole should not provide competition with Meadowlands businesses." Because the NJSEA is statutorily obligated to "promote[], whenever practicable, full and free competition," appellants reason that accepting the Xanadu proposal violated the NJSEA's authority.
Mr. Winkler addressed this contention in the supplemental report by stressing the RFP process is a "flexible, discretionary venture" that was not subject to formal bidding requirements, as noted in Hartz I, supra, 369 N.J. Super. at 191. Mr. Winkler emphasized that the RFP did not prohibit proposals that competed with local businesses but merely "discourage[d]" them. He viewed this as language that was "precatory in nature," part of the RFP's "extraordinary open-endedness." Mr. Winkler further noted that in Resolution 2004-36, the NJSEA's Board had found that the mix of tenants proposed by Mills was "consistent with the Authority's original intent," thereby supporting the view that the Mills proposal "did not fail to conform to the RFP in any material way that required its rejection."
In the record developed in the supplemental hearing, Mr. Carlson presented a detailed analysis as to the adverse and "severe" affect on local businesses he anticipated from the Xanadu project. However, as Mr. Winkler found, the NJSEA had the discretion to strike the proper balance between furthering its mission and considering the economic needs of nearby businesses and communities. We conclude that the NJSEA did not violate any statutory requirements by selecting the Xanadu proposal, even if Hartz Mountain's witness is correct that Xanadu will have a severe negative effect on the region's existing businesses.
On this point, we note that Braha's store in Jersey City does not lie within the Meadowlands District. The RFP had sought a project that would avoid "materially competing with existing business in the Meadowlands District." As Mills/Mack-Cali notes, Braha has been able to survive competition from the more proximate Newport Centre and Hartz Mountain's Secaucus outlets, so Braha's business may not be adversely affected by the Xanadu project.
C. Obtaining Liquor Licenses.
Braha further asserts that the NJSEA exceeded its statutory authority in seeking and obtaining liquor licenses for the Xanadu tenants. Braha references an appeal from a June 23, 2005, advisory opinion of Jerry Fischer, the Director of the Division of Alcoholic Beverage Control (DABC), A-6348-04T5, and suggests consolidating the present appeal with that appeal. In fact, there are two consolidated appeals arising from that DABC opinion, A-6348-04T5 and A-6393-04T5. Braha is not a party to either of those appeals, and he apparently did not appeal the DABC advisory opinion. The DABC opinion was issued well after the present appeals were perfected, and has little to do with the issues raised on this appeal. Therefore, Braha's request is without merit. Moreover, none of Braha's notices of appeal mentioned anything about liquor licenses.
Mills/Mack-Cali notes that the liquor licenses that will be granted through a special concessionaire permit to Xanadu tenants is similar to the concessionaire permits presently allowed to those who serve alcoholic beverages at the stadium, arena, and racetrack. The DABC Director is not a party to the present appeals, but is a party to those other pending appeals. Therefore, we decline to address the merits of these liquor license arguments in these appeals.
III.
Hartz Mountain and Braha also contend that the RFP process violated public contracting requirements because the NJSEA and Mills/Mack-Cali purportedly engaged in substantial pre-RFP negotiations. Hartz Mountain further contends that the NJSEA violated public contracting procedures because, (1) the NJSEA waived numerous material nonconformities between the RFP and Mills/Mack-Cali proposal, and (2) Mills' conveyance of the Empire Tract, characterized as a "key feature" of the Mills/Mack-Cali proposal, was viewed as a gift but actually was structured so it would cost taxpayers over $160 million.
A. The Pre-RFP Relationship.
Hartz Mountain and Braha contend that the numerous contacts between Mills and the NJSEA or State officials from 1995 through June 2002 which they developed in the supplemental bid-protest hearing gave Mills an undue advantage, or as Hartz Mountain described it, "served to impermissibly provide Mills an opportunity to test, refine, and perfect its Arena site development project" ideas with input from the NJSEA. Appellants consider it particularly troubling that Mills had made a pre-RFP proposal that was never disclosed to them, and about which they had no opportunity to gather facts during the bid protest hearing.
In the Supplemental Report and Recommendation, Winkler acknowledged that the record showed "numerous interactions" between the NJSEA and Mills prior to the RFP's issuance. However, he found this "unsurprising . . . considering the proximity and developmental goals of the parties, so I draw no negative connotation from the number or periodic frequency of these communications." Finding that Hartz Mountain had presented no credible evidence of "any fraudulent pre-selection conduct," Mr. Winkler wrote "I am unable to conclude that these interactions produced an illegal or unfair selection process." Mr. Winkler also cited to an acrimonious relationship between the NJSEA and Mills during the period when the NJSEA was advancing the Kajima development and in the proceedings before the Army Corps of Engineers.
Mr. Winkler further stressed the reference in the letter from the three Commissioners to the NJSEA's plan to undertake a competitive RFP process, which might have undermined Mills' Empire Tract application "even if another bidder prevails at the [NJSEA] site." This was also adverse to Mills' frequently pressed preference to obtain a no-bid deal to develop the NJSEA site. Mr. Winkler found significant that the NJSEA had chosen to undertake a public solicitation process, mailing invitations to over 200 developers to submit a proposal, "because it wanted to test the marketplace and obtain concept plans from all sorts of developers -- hardly what would have taken place if there was an agreement already in place." Mr. Winkler further observed that the NJSEA's efforts undertaken for the RFP, such as appointing a Selection Committee and a Stakeholders Advisory Group and holding various briefings and conferences, did not reflect an agency that was merely "going through the motions."
Mr. Winkler added that the record did not support Hartz Mountain's view that the NJSEA and Mills/Mack-Cali had a pre-RFP agreement, and he noted significant differences between the Xanadu proposal and the Mills' former plans for the Empire Tract. Mr. Winkler further rejected Hartz Mountain's claim that the bid-protest hearing process had prevented it from fully developing the record. He rejected Hartz Mountain's insinuation that Mills/Mack-Cali had presented a written pre-RFP development proposal to the NJSEA; Mr. Winkler viewed the reference in the letter from the three Commissioners to a "presentation to" the NJSEA as supporting the conclusion that there was no such document. Mr. Winkler noted further that pre-RFP communications with the NJSEA "were widely reported in newspapers of general circulation at the time," and that Hartz Mountain had admitted its own pre-RFP contacts with the NJSEA regarding developing the Arena site.
As Mr. Winkler properly observed, governmental bodies are presumed to have properly exercised their authority and "are not to be approached with a general feeling of suspicion." Miller v. Passaic Valley Water Comm'n, 259 N.J. Super. 1, 14 (App. Div.), certif. denied, 130 N.J. 601 (1992). Unless there is evidence of fraud, favoritism, corruption or improper competitive advantage, the agency decision should not be overturned. Turner Constr. v. New Jersey Transit, 296 N.J. Super. 530, 535 (App. Div. 1997).
After analyzing the record in light of these standards, we conclude that the pre-RFP contacts between the NJSEA and Mills did not render the RFP process unfair. As noted by Mr. Winkler, the NJSEA had legitimate reasons to meet with Mills and discuss its plans to develop the Empire Tract. Those meetings were consistent with the NJSEA's oversight of the Meadowlands Sports Complex, its plans to redevelop the site, and its traffic and environmental concerns for the region. The details about the Kajima proposal that resulted from the NJSEA's first RFP demonstrates that the nature of development that the NJSEA was willing to undertake was developed before the NJSEA began to consider Mills as a possible developer for the NJSEA site. Moreover, if the NJSEA was truly aligned with Mills/Mack-Cali, it would have sought to proceed with a no-bid contract, and would not have taken such efforts to obtain and analyze bids from other developers.
Because the NJSEA has presented a rational basis for its pre-RFP contacts and the receipt and evaluation of the bids was thorough and unbiased, we reject appellants' challenge to the bid process. Furthermore, the record on this point is extensive and further discovery or additional hearings are not required in this matter.
B. Waiver of Material Nonconformities.
Hartz Mountain also contends that the NJSEA created an uneven playing field for bidders by wholly disregarding numerous material nonconformities in Mills/Mack-Cali's Xanadu proposal. Among the alleged nonconformities, Hartz Mountain contends the Xanadu proposal: (1) did not contain a new use for the Arena itself, and proposed uses of the Arena that would compete with the planned Newark arena; and (2) failed to include profit-sharing and profit-participation amounts in a calculation of the total return to the NJSEA. Hartz Mountain notes that after Mills/Mack-Cali's bid was selected, the NJSEA allowed further nonconformities with the proposed plan and bid specifications, including allowing Mills/Mack-Cali to reduce its contribution for infrastructure improvements, and to expand its planned development to the Sports Complex property west of Route 120.
We reject, as without sufficient merit to warrant extensive discussion, R. 2:11-3(e)(1)(E), the claims by Hartz that the Mills/Mack-Cali proposal was nonconforming because it did not contain a new use for the Arena itself, and that proposed uses of the Arena would compete with the planned Newark arena. The RFP made it clear that the NJSEA was flexible with regard to the continued use of the Arena. Moreover, at the pre-proposal conference, attended by Hartz, the NJSEA advised all interested parties that the policy guiding the RFP process was to maximize the value of the Arena site beyond its existing uses. Simply stated, the bidders were not required to propose a reuse for the Arena. All bidders were thereby free to submit a redevelopment concept that left the Arena, as it existed, in place.
Additionally, the RFP did not prohibit proposals that would have a competitive effect on local businesses in the Meadowlands District, Rather, the RFP made it clear that the NJSEA envisioned a multi-use destination that would expand the product mix without "materially competing" with existing businesses in the District. As noted by Mr. Winkler in both of his reports, the persuasive evidence presented at the hearings was that the existing retail centers target local and immediate communities and have tenant mixes that would not compete with the Xanadu proposal, which is conceived as a family entertainment destination with emphasis placed on recreational entertainment and retail.
Hartz Mountain also alleges that Mills/Mack-Cali failed to include profit-sharing and profit-participation amounts in a calculation of the total return to the NJSEA. Mr. Winkler rejected this argument, finding that the RFP did not require a profit-sharing component, and that Mills/Mack-Cali's proposal did include an Attachment IV, showing the projected total return to the NJSEA. We agree with the NJSEA that in the context of this kind of RFP, this does not constitute omission of a material item that would disqualify the Mills/Mack-Cali's proposal from consideration.
C. The Empire Tract Conveyance.
Hartz Mountain also asserts that Mills/Mack-Cali was given an unfair advantage due to the "gift" of the Empire Tract, which was a "key feature" in Mills/Mack-Cali's favor. Moreover, Hartz Mountain contends, the gift evaporated after the bid award, because the Wetlands Mitigation Bank (WMB) agreement between Mills and the NJSEA required the NJSEA to purchase the Empire Tract for $26.8 million. Hartz Mountain asserts that Mills/Mack-Cali never provided an appraisal for the land, which Hartz Mountain estimates as worth approximately $6 million based on Meadowlands Commission figures. Furthermore, Hartz Mountain asserts that respondents admit that NJSEA's profits from the Xanadu project, more than $180 million, will entirely be used to reimburse Mills/Mack-Cali for its costs of "acquiring and carrying" the Empire Tract, at a usurious 25% to 30% rate of return.
Mr. Winkler did not address this issue in any detail in his Supplemental Report and Recommendation, stating that he had addressed it fully in his first hearing report and that Hartz Mountain had raised nothing new. In his first hearing report, Mr. Winkler noted only the "self-contradictory" nature of Hartz Mountain's argument, which both asserted that the NJSEA was not empowered to take jurisdiction over the Empire Tract and then conceded that Mills/Mack-Cali was transferring the Empire Tract to the State, not to the NJSEA. Mr. Winkler added that Hartz Mountain had cited no RFP provision or other authority that prohibited Mills from making such a transfer.
The NJSEA described among the economic terms included in the Mills proposal "Environmental Enhancements" embodied by Mills/Mack-Cali's "plan to convey its adjacent $96 million Empire Tract to the State or other entity," and Mills/Mack-Cali's proposal to operate a wetlands mitigation bank on that site.
In the bidding statute relevant to this appeal, as we confirmed in Hartz I, the NJSEA "may make, negotiate, or award the purchase, contract, or agreement in any manner which the authority deems necessary to serve its unique interests and purposes and which promotes, whenever practicable, full and free competition by the acceptance of quotations or proposals or by the use of other suitable methods." (Hartz I, supra, 369 N.J. Super. at 189 (emphasis added)); see N.J.S.A. 5:10-21.2. The statute requires that the NJSEA advise all bidders about the same items subject to the bid, but it does not constrain the bidders in how to respond. In a more routine purchase, an RFP could specify, for example, that only a cash payment was permitted, or that the particular terms of installment payments were non-negotiable. In those cases, a bid could not be accepted if a bidder offered an alternative payment approach.
Here, however, the contract did not involve a "cash for widgets" arrangement; instead, the NJSEA sought and expected a wide range of approaches for developing the site. Responding bidders might have offered to develop a specialized type of sports facility, such as an indoor ski slope or a minor league baseball stadium, which the other bidders did not have the rights to offer. One would expect the bidders to have different abilities to offer differing development choices. Mills/Mack-Cali had rights in a neighboring property and could offer a plan to ensure that that property would remain undeveloped. That offer is qualitatively no different from the unique abilities of any bidder to offer an enticing package in response to this type of RFP. Hartz Mountain cites no legal authority to support or explain its view that the offer to preserve the Empire Tract undeveloped was improper.
In considering the NJSEA's approach to this RFP process, another factor is the NJSEA's statutory authority regarding the vicinity of the Sports Complex site. Among its long list of statutory powers, the NJSEA is granted the power:
To acquire in the name of the authority or otherwise, on such terms and conditions and in such manner as it may deem proper, or . . . by the exercise of the power of eminent domain, any land and other property, including land under water, meadowlands, and riparian rights, which it may determine is reasonably necessary for any of its projects . . . and any fee simple absolute in, easements upon or the benefit of restrictions upon abutting property, to preserve and protect any project . . . ;
[N.J.S.A. 5:10-5(m).]
This statute authorizes the NJSEA to either purchase or acquire by condemnation properties abutting NJSEA's lands if "reasonably necessary" for any of its projects, or "to preserve and protect any project" under the NJSEA's authority. The statute provides ample authority for the NJSEA to take action to acquire the Empire Tract, which lies adjacent to the Sports Complex site, if the NJSEA concluded that doing so was important to the continued viability of the complex.
Moreover, the record supports the conclusion that, for reasons of environmental preservation and to avoid an additional source of traffic on the congested roadways surrounding the Sports Complex, the NJSEA determined that preserving the Empire Tract as undeveloped land was important to the NJSEA's mission. Although fair-minded persons can debate whether acquiescence of the property was necessary, given that the wetlands preservation laws may have left that land unavailable for development in any event, still, the NJSEA had authority and a governmental interest in preventing development on that adjacent site. From that perspective, we conclude that the NJSEA did not overstep its authority in accepting the offer to preserve the Empire Tract as part of Mills/Mack-Cali's response to the RFP.
We also conclude that the NJSEA did not act beyond its scope of authority in the manner in which the Empire Tract was ultimately handled in the Development Agreement. Hartz Mountain contends that after the NJSEA selected Mills as the developer, the NJSEA agreed to pay Mills $26.8 million for the Empire Tract, without the benefit of an appraisal or any analysis. Hartz Mountain asserts that this was untoward, because the Empire Tract was devalued to about $6 million when the Meadowlands Commission "rezoned it as environmental conservation in March 2004." Hartz Mountain further argues that the Meadowlands Conservation Trust, to which the Empire Tract was ultimately conveyed, bought a title insurance policy on the Empire Tract for about $6 million; from this, Hartz Mountain concludes that the NJSEA overpaid by approximately $20 million when the Empire Tract was transferred.
The NJSEA and Mills/Mack-Cali respond, consistent with Winkler's description in the supplemental report, that Mills' initial offer was to transfer the Empire Tract property to the State subject to Mills' retaining rights in a Wetlands Mitigation Bank on the site. In the negotiations that led to the Redevelopment Agreement, the NJSEA determined to acquire from Mills the rights in the mitigation bank, as well. Mills/Mack-Cali points out that the public benefits of this purchase "are obvious" because if Wetlands Mitigation Bank rights are scarce, the costs of development that would destroy wetlands would be higher, resulting in less wetlands destruction.
We perceive no reason to overturn the NJSEA's approach to contracting regarding the Empire Tract. It selected a means of compensating Mills for the Wetlands Mitigation Bank rights that Mills had sought to retain in conveying the property to the NJSEA as part of the Xanadu proposal. The NJSEA had valid concerns about the traffic and environment around the Sports Complex site, which it decided to address by buying out Mills' rights to develop the Empire Tract. The record supported the method that the NJSEA chose as one valid means of achieving its goals, and Hartz Mountain has failed to show that the NJSEA's payments for this unique property were unreasonable.
IV.
Hartz Mountain also argues that the selection of the Mills/Mack-Cali proposal constituted a gross abuse of NJSEA's agency discretion, because NJSEA relied upon a flawed financial analysis of the RFP proposals. Hartz Mountain contends that although Mr. Zoffinger told the NJSEA Board that the Xanadu proposal provided the best economic package of the competing proposals, that conclusion was based upon flawed analysis by NJSEA's accounting consultant Deloitte & Touche (Deloitte). Specifically, Hartz Mountain contends that Deloitte's February 2003 net present-value calculations relied upon the unrealistic assumption that the NJSEA would earn a 9.5% interest rate on $160 million beginning on January 1, 2003, even though no payment had been made as of the report date, nor even as of December 2004. Moreover, under the subsequently executed agreements, Mills/Mack-Cali's net initial payment would be just $97.2 million; thereby, using the 9.5% interest rate for a $97.2 million payment as of January 1, 2005, the Xanadu economic package would rank third among the three bids. Hartz Mountain urges that the agreements also allowed Mills/Mack-Cali to divide the initial payment into three installments and to defer payments on future rent installments, further diminishing the economic value to the NJSEA. Therefore, argues Hartz Mountain, even using Deloitte's calculations, Xanadu's financial picture was least favorable among the three bidders regarding undiscounted rent payable to the NJSEA from 2005 to 2025, and regarding undiscounted PILOT payments.
In his report, Mr. Winkler addressed this argument in some detail. At the outset, he found that under the terms of the RFP the NJSEA would have been justified in choosing the proposal that was the least favorable economically, because the NJSEA's redevelopment plans focused on numerous strategic planning goals that were not financial. Nevertheless, in reviewing the financial terms, Mr. Winkler still found that the Mills/Mack-Cali proposal was financially superior to the others, emphasizing that Mills/Mack-Cali's guaranteed, up-front ground lease payment of $160 million as compared with other more speculative payment terms in the Hartz Mountain and Westfield proposals.
We conclude that Mr. Winkler's approach was thorough and sound. Although reasonable minds might have ranked the proposals differently, we discern no reason to reverse the NJSEA's exercise of its discretion in analyzing the financial terms of these competing packages.
V.
Hartz Mountain next argues that it was denied due process in the bid protest proceedings, because it was not given an opportunity to examine witnesses or to obtain certain information exclusively held by Mills/Mack-Cali or the NJSEA, and because Mr. Winkler was not an impartial hearing officer.
A. No Opportunity to Examine Witnesses or to Obtain
Information Exclusively Held by Mills or the NJSEA
Hartz Mountain argues that, contrary to our direction in Hartz I, supra, the NJSEA failed to set ground rules for the second round of bid protest hearings that would ensure "the protesters' opportunity to present both facts and law," and would lead to a decision that contained "fully developed findings of fact and conclusions of law." 369 N.J. Super. at 188-89. Hartz Mountain asserts that the NJSEA's informal hearing format could not and did not allow the bid protestors the opportunity to seek facts that were in the exclusive possession of Mills/Mack-Cali and the NJSEA, including facts about the pre-RFP negotiations; why Mills/Mack-Cali's pre-RFP proposal was never produced; why the NJSEA exacted from Mills/Mack-Cali a $500,000 payment in advance of negotiating the developer's agreement; the extent of Winkler's involvement in the NJSEA's efforts to obtain legislative approval for operating retail facilities at the Meadowlands Complex and for acquiring the Empire Tract; and the various agreements executed by the NJSEA and Mills/Mack-Cali.
We disagree. The extent of documentary evidence that Hartz Mountain had obtained before the supplemental hearing was conducted, and the thoroughness of the Supplemental Report and Recommendation undermines this argument. On the issues raised by Hartz Mountain, the record contained sufficient detail to allow Winkler to address each substantive point and create a comprehensive and thorough record. Although Hartz Mountain frequently stated during the supplemental hearing that its information was incomplete, it failed to establish that such information was essential to the resolution of any issue raised at the bid protest hearing.
B. Hearing Officer.
Hartz Mountain asserts that the bid-protest procedures were further flawed because Mr. Winkler, as the NJSEA's chief legal officer and current Chief Operating Officer, was not an impartial hearing officer. We disagree.
At the opening of the supplemental hearing, Hartz Mountain's counsel set forth reasons as to why it was asking Mr. Winkler to recuse himself. Specifically, Hartz Mountain referenced a memorandum dated June 9, 2003, the day before the initial hearing began, in which Charles Liebling, a Windels Marx partner, was directing "George and Carl," presumably Zoffinger and Goldberg, how to handle themselves at a meeting with State legislators and "stakeholders." According to Hartz Mountain's counsel, Mr. Liebling's memorandum showed "a clear recognition of the difficulties" brought about by Mr. Winkler's role as hearing officer, in view of his role as general counsel. In Hartz Mountain's view, this demonstrated a recognition of "at minimal an appearance issue and an issue that could impact on matters of impartiality."
Referencing the first hearing report, Hartz Mountain's counsel took note of Mr. Winkler's representation that he had not been involved in any efforts to amend the NJSEA enabling legislation. Hartz Mountain pointed to two documents that had recently been identified on a privilege log: a January 26, 2003 e-mail from another Windels Marx attorney regarding the legislative efforts, which was copied to Mr. Winkler; and a January 31, 2003 e-mail from Mr. Winkler to Zoffinger, Lampen, and Coscia, described on the log as "E-mail correspondence providing advice with respect to proposed legislation." Hartz Mountain urged that these documents be disclosed in the public interest, which Mr. Winkler stated he would consider.
Hartz Mountain also raised the difficulty of having to try its case before Mr. Winkler, when he had been personally involved in matters to which Hartz Mountain was objecting, including the NJSEA's execution of documents and discussions regarding strategy on proceeding with permitting issues despite the pending appeals. Hartz Mountain noted the provision in the Development Agreement in which NJSEA agreed to participate with Mills/Mack-Cali jointly in defending any appeals regarding the project, regardless of the merits. Hartz Mountain took the view that "it compromises beyond repair your own independence."
Hartz Mountain additionally pointed out that, despite initial denials of any agreements between Mills/Mack-Cali and the NJSEA, in March 2003 the NJSEA admitted an agreement whereby Mills/Mack-Cali forwarded to Mr. Winkler, for the NJSEA, a check for $500,000, which Hartz characterized as being "[f]or the privilege of commencing negotiations" which were already underway. Hartz Mountain noted that the agreement with Mills/Mack-Cali required the NJSEA to return that money if it is ever determined that the Xanadu project is ultra vires.
Hartz Mountain further asked Mr. Winkler why the proceedings would incorporate Mills/Mack-Cali, and urged that Mr. Winkler alter the process to allow for sworn witnesses and cross-examination. Westfield joined in this request.
In his Supplemental Report and Recommendation, Mr. Winkler asserted that he had fully explained in his Report and Recommendation that nothing was improper regarding his service as hearing officer. Mr. Winkler asserted the right to reject Hartz Mountain's assertion out of hand, claiming that Hartz Mountain made no effort to address the relevant case law or factual allegations. Mr. Winkler also found that our decision in Hartz I, supra, had "affirmed [his] designation as hearing officer" because the court had cited and agreed with Winkler's reasoning in his first Report and Recommendation regarding whether ancillary retail uses could be permitted under the NJSEA's authorizing statutes. Moreover, Mr. Winkler found no merit in Hartz Mountain's claim as to his partiality, adding that he declared and found that "I have no pecuniary interest in the outcome of this matter, nor have I been the target of personal criticism from either of the protesters. Hartz has not contended otherwise."
We disagree with Mr. Winkler's characterization of the Hartz I case as having "affirmed [his] designation as hearing officer." We addressed only some limited issues in that case, primarily remanding on the public records issues, and provided no analysis of the challenge to or affirmance of Mr. Winkler's role. We simply cited to the first hearing report as conveying reasoning with which we agreed regarding allowing retail uses in the RFP.
Although it is often argued that having the same individuals within an agency in these dual prosecutorial and adjudicatory roles violates due process, proof of actual bias is necessary to overturn administrative actions on that basis. In The Matter Of Petition For Review Of Opinion No. 583 Of The Advisory Committee On Professional Ethics (In re Opinion 583), 107 N.J. 230, 236 (1987). The In re Opinion 583 case noted that when an agency is performing both prosecutorial and adjudicative functions in the same administrative proceeding, the Attorney General's office appoints one Deputy Attorney General (DAG) to serve as prosecutor and provides separate counsel to advise the agency head in adjudicating the matter. Id. at 232. The Court addressed whether the impartiality of the agency head would be impermissibly undermined if the prosecuting DAG were permitted to communicate ex parte with the agency head during the prosecutorial phase of the proceeding. Id. at 232-33. That case primarily involved the communication of settlement proposals to the decisionmaker, and the Court found that this could occur without jeopardizing the fairness of the proceedings. Id. at 239. The case also involved administrative proceedings that were heard before an administrative law judge at the Office of Administrative Law, an agency created to separate the hearing officer and administrative decisionmaker roles. Id. at 233-34, 237-38.
Here, there was no such physical separation between hearing officer Winkler and the NJSEA board members who served as the final decisionmakers. In addition, Mr. Winkler's duties at the NJSEA involved him in some ways in the interactions between Mills/Mack-Cali and the NJSEA, including receipt of the $500,000 check payable to the NJSEA which it required of Mills/Mack-Cali before the negotiations of the Development Agreement could proceed. As Hartz Mountain points out, this amount would need to be returned by the NJSEA to Mills/Mack-Cali if the Xanadu project was determined to be ultra vires.
Nonetheless, Hartz Mountain has shown no actual bias on Winkler's part. Particularly because this is a situation involving not someone's rights, but a protest regarding the competition to obtain the privilege of a public contract, we conclude that Mr. Winkler's level of involvement in the many contacts that Hartz Mountain has noted did not require his disqualification as the hearing officer.
VI.
Braha contends that he was denied a forum and the opportunity to litigate his claims, because he was not permitted to participate in or attend the bid protest hearings. Braha notes that although the Law Division dismissed Hartz Mountain's trial court complaint for failure to exhaust administrative remedies, that basis for dismissal could not have applied to Braha, because the NJSEA took the position that Braha had no bid protest rights. Braha further asserts that the trial court twice erred in failing to transfer or adjudicate his complaints, leaving him without a forum to raise his issues, and without an opportunity to develop a complete record.
Pursuant to R. 2:2-3(a)(2), Braha is presently in the proper forum to raise his challenges to the actions of the NJSEA, a state administrative agency, unless we determine that a further development of the factual record is required. In Elizabeth Fed'l Savings & Loan Ass'n v. Howell, 24 N.J. 488 (1957), the Court addressed the issue of standing to challenge an administrative action on appeal despite lacking standing to participate in the administrative proceedings themselves. Regarding the objectors' standing to seek judicial review of administrative action, the Court wrote that this "should not be confused with the right to be heard initially on the subject of the determination of the administrative agency . . . ." Id. at 499. The Court added that
this right to seek judicial review of administrative decisions inheres not only in those who are direct parties to the initial proceedings before an administrative agency . . . but also belongs to all persons who are directly affected by and aggrieved as a result of the particular action sought to be brought before the courts for review.
[Id. at 499-500.]
Citing this distinction established by the Elizabeth Federal Court, in In re Waterfront Dev. Permit No. WD88-0443-1, 244 N.J. Super. 426, 437 (App. Div. 1990), certif. denied, 126 N.J. 320 (1991), we agreed with the NJDEP that the nonprofit American Littoral Society (ALS) had no rights to participate in the administrative proceedings for a waterfront development permit but had standing, and indeed prevailed, in challenging the NJDEP's action on appeal. Id. at 437-38.
Given that dual approach to standing, the trial court's decision that Braha's claims had not been properly filed in the Law Division was well founded. In Nachtigall v. New Jersey Turnpike Auth., 302 N.J. Super. 123, 127, 144 (App. Div.), certif. denied, 151 N.J. 77 (1997), we found that, for purposes of determining jurisdiction, the consortium of four agencies operating New Jersey's toll roads and interstate toll connections and contracting to obtain the E-ZPass system, was a state agency. As such, we found no merit to the taxpayer Nachtigall's argument that his objections to the bid award had been improperly transferred to the Appellate Division and consolidated with the bid protest appeal. Id. at 143-44.
Although our decision in Nachtigall supports the view that his claims should not have remained in the Law Division, Braha argues that the trial court erred in ordering dismissal instead of a transfer to the Appellate Division. Given the history of this matter, we conclude that whether Braha arrived in this court by way of dismissal of the complaint, as opposed to a transfer, is moot. As to all of the issues that were raised in the Hartz Mountain appeals, the trial court anticipated that Braha, like Hartz Mountain and Westfield, could raise any issues in this court after the bid protest hearings were completed, and that has occurred.
Notably, in the Elizabeth Federal case, the appeal was remanded to the administrative agency for further hearings, because the record on appeal showed that a significant amount of information had been relied upon by the agency but not shared with the objectors, who were not participants in the administrative proceedings but had standing to appeal. 244 N.J. Super. at 506.
Here, as to all of the Braha issues that mirror Hartz Mountain's and Westfield's issues, Braha has failed to make a case that additional fact-finding is needed. Braha has the burden on appeal of overcoming the presumption that the NJSEA's actions are reasonable and lawful and has not met that burden.
At the time the matter was before the trial court, the only issues that were unique to Braha dealt with the PILOT program payments, and the trial found that those issues were not yet ripe, as no final agreement with Mills/Mack-Cali was in place. Because the redevelopment agreement is now in place, and since further fact-finding on that issue is not necessary, we will consider the PILOT program issue later in this opinion.
VII.
Hartz Mountain and Braha further contend that the property being leased to Mills/Mack-Cali is not eligible for the NJSEA's statutory property tax exemption. They argue that by entering into a seventy-five year lease with Mills/Mack-Cali, the NJSEA has effectively transferred to Mills/Mack-Cali its statutory exemptions from local taxation and land use requirements. They note that if the NJSEA were to sell Meadowlands Complex real estate, the new owner would be subject to the Meadowlands Commission's land use regulations. They contend that under the agreements signed with Mills/Mack-Cali, the NJSEA has impermissibly "abdicated its rights of ownership and control," "effectively selling the Arena site to a private entity (Mills) to manage a private enterprise (a shopping mall)" and improperly shielding Mills from tax and land use requirements. Furthermore, Hartz Mountain argues that the NJSEA grossly abused its discretion by agreeing that if Xanadu's PILOT payment scheme is held to violate N.J.S.A. 5:10-22, then the NJSEA must pay Mills/Mack-Cali's real property taxes.
Hartz Mountain adds that the NJSEA violated constitutional and statutory provisions, purporting to cede its authority, by granting Mills/Mack-Cali veto power over modifications to the NJSEA's sports and entertainment leases and other uses of the Meadowlands Complex, and by exempting Xanadu from any claim of interference with the NJSEA's operations.
The NJSEA argues that Hartz Mountain failed to raise these issues before the hearing officer, and, in any event, the NJSEA has not donated land or appropriated any money to Mills/Mack-Cali.
Mr. Winkler addressed this issue in the Supplemental Report and Recommendation. He found no merit in the contention that the property tax exemption was lost, because the Xanadu development was a "project" of the NJSEA. N.J.S.A. 5:10-18(a) provides:
a. All projects and other property of the authority, . . . is hereby declared to be public property devoted to an essential public and governmental function and purpose and shall be exempt from all taxes and special assessments of the State or any political subdivision thereof; provided, however, that when any part of the project site not occupied or to be occupied by facilities of the project is leased by the authority to another whose property is not exempt and the leasing of which does not make the real estate taxable, the estate created by the lease and the appurtenances thereto shall be listed as the property of the lessee thereof, or his assignee, and be assessed and taxed as real estate. . . . .
[Emphasis added.]
Clearly, the Xanadu development is one of the "projects . . . of the authority." Ibid. Accordingly, the tax exemption of this statute would apply unless the "provided, however" provision is effective. We do not view that provision as applying here, because it arises only when "any part of the project site not occupied or to be occupied by facilities of the project is leased by the authority to another . . . ." The land at issue will be "occupied by facilities of the [Xanadu] project[.]" That project is intended to serve the NJSEA's sports and exposition goals by bringing new sports and entertainment venues to the Sports Complex, enhancing the existing venues with new amenities including adjacent preserved wetlands on the Empire Tract and, potentially public transit. Because these reasons can be viewed as a valid means of achieving the NJSEA's statutory purposes, this case is unlike those cited by Braha where the loss of a tax exemption occurs because the agency is only pursuing revenue, and not its mandated purposes. Accordingly, the NJSEA's property tax exemption applies to the Xanadu project.
We also find no public policy rationale for withholding the NJSEA's statutory property tax exemption for projects that incorporate long-term leases. The validity of the project should stand or fall on its own merits; if the project is otherwise valid, then the statutory purposes of the tax exemption are met, regardless of the length of the lease.
VIII.
Braha argues that the agreements between the NJSEA and Mills/Mack-Cali violate statutory and constitutional PILOT provisions because: (1) the statute provides for only the NJSEA to make PILOT payments, not Mills/Mack-Cali; (2) the NJSEA cannot amend its own statute to allow a private entity to make PILOT payments; (3) Braha has been denied discovery and the opportunity to make a record regarding the PILOT payments; and (4) the action is void because the NJSEA exceeded the intent and language of its statutory authority.
Braha emphasizes that the NJSEA's February 12, 2003 fact sheet, upon announcing Mills/Mack-Cali's selection, asserted that in the first twenty years of the Xanadu project's operation, "East Rutherford and the surrounding communities will experience an almost ten-fold increase in tax payments. . . . All communities in the Meadowlands district can expect significant improvements in their tax sharing positions." Braha notes that this promise of increased payments was not borne out under the redevelopment agreement and collateral agreements.
The NJSEA and Mills/Mack-Cali first assert that Braha should not be heard on these arguments because he failed to file a notice of appeal from the redevelopment agreement, which embodied the NJSEA's action relating to PILOT payments. Although that is technically correct, we elect to entertain Braha's argument. Braha has been raising the PILOT payment issue from the outset and appeared to believe it was preserved when his Law Division complaint was dismissed. Braha knew they would need to re-file in the Appellate Division after the bid protest hearings were concluded, and did so twice. The redevelopment agreement appeals also were consolidated with the bid protest appeals, further blurring whether Braha was free to argue on that basis. However, we conclude that Braha's arguments are without merit.
N.J.S.A. 5:10-18(b) and (c) provide:
b. To the end that there does not occur an undue loss of future tax revenues by reason of the acquisition of real property by the authority for the meadowlands complex the authority annually shall make payments in-lieu-of-taxes to the municipality in which such property is located in an amount computed in each year with respect to each such municipality by multiplying the total amount to be raised by real property taxation in each such year by a fraction, the numerator of which is the amount of real property taxes assessed against the property acquired by the authority in the tax year in which this act becomes effective and the denominator of which is the total amount to be raised by real property taxation in such municipality in the tax year in which this act becomes effective. Such payments shall be made in each year commencing with the first year subsequent to the year in which such real property shall have been converted from a taxable to an exempt status by reason of acquisition thereof by the authority.
c. The authority is further authorized and empowered to enter into any agreement or agreements with the Meadowlands Commission or with any county or municipality located in whole or part within the Hackensack meadowlands whereby the authority will undertake to pay any additional amounts to compensate for any loss of tax revenues by reason of the acquisition of any real property by the authority for the meadowlands complex or to pay amounts to be used by such commission, county or municipality in furtherance of the development of the Hackensack meadowlands, including the meadowlands complex. The commission and every such county and municipality is authorized and empowered to enter into such agreements with the authority and to accept payments which the authority makes thereunder.
[Emphasis added.]
This statutory language makes clear that the NJSEA is only obligated to make PILOT payments to East Rutherford, but it is authorized to make PILOT payments to other Meadowlands communities. Braha parties are concerned that Jersey City, where their businesses are located, will be hurt financially by the Xanadu project, without receiving any of the PILOT payments. However, Braha's sought remedy lies with the Legislature, because the language of N.J.S.A. 5:10-18(b) and (c) allows for that result. Apparently the "Proposed Economic Terms" announced in the February 12 document, regarding a "tenfold increase" in PILOT funds, could not be achieved. This departure might have given the NJSEA a reason to decide not to sign the redevelopment agreement, but it does not provide a basis upon which Braha may seek to invalidate the NJSEA's action.
There is no merit to Braha's assertion that the NJSEA is violating the statute by granting Mills/Mack-Cali, a private entity, the NJSEA's right to make PILOT payments. The NJSEA is the party that signed the PILOT Addendum agreement with East Rutherford, agreeing to pay East Rutherford increased PILOT payments. Even if Mills/Mack-Cali had a role in negotiating that agreement, or was required to make payments to the NJSEA to cover the PILOT payment amounts, the allegation that the NJSEA has violated its statute remains unsupported.
IX.
To the extent we have not discussed other issues presented by appellants in these consolidated appeals, we conclude they are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
Hartz also contended that the Xanadu proposal was nonconforming because it was significantly retail and completed with local businesses. We have already addressed these issues in this opinion.
(continued)
(continued)
3
A-1169-03T3
August 17, 2006
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