Case Title: The Times of Trenton Publishing Corporation v. Lafayette Yard Community Development Corporation

Citation: 

Docket Number: a-22-04

State: new-jersey

Court: New Jersey Supreme Court

Date: 2005-06-15T00:00:00Z

Document:
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). In or about March 2002, Albert Raboteau, a reporter from The Times sought and was denied access to a meeting of the Board of Lafayette Yard. The Mayor of Trenton, Douglas Palmer, informed Raboteau that Lafayette Yard was a private corporation and that OPMA did not apply to the activities of the Board. Raboteau was denied access to Board meetings on June 27 and on August 29, 2002. Raboteau also was denied access to the minutes of both meetings. The Times filed suit to enjoin Lafayette Yard from excluding the public from its board meetings in violation of OPMA, and to require the trustees to produce for public inspection the minutes of all past and future Board meetings. The trial court denied injunctive relief and issued an opinion holding that Lafayette Yard was neither a public body, as defined by OPMA, nor a public agency subject to OPRA and dismissed the complaint. The Appellate Division, in a reported opinion, reversed and remanded the matter for further proceedings. This Court granted certification to consider whether Lafayette Yard is a public body subject to OPMA or a public agency subject to OPRA. HELD: Lafayette Yard is subject to both statutes because it is a public body that performs a governmental function within the meaning of OPMA and an instrumentality or agency created by a political subdivision under OPRA. 1. If an entity is a public body within the meaning of OPMA, it is subject to OPMA, and must open its meetings to the public. The relevant test is framed in the alternative the entity must perform a governmental function or must be authorized to expend public funds. In respect of this case, we must determine whether Lafayette Yard s relationship with the City and the requirements under which it operates are such that it satisfies either alternative. (pp. 14-15) 2. Lafayette Yard was created consistent with the provisions of IRS Revenue Ruling 63-20 and IRS Revenue Procedure 82-26, with the goal of reducing the costs of the project through the issuance of tax-exempt bonds. Those provisions impose various conditions that suggest the Corporation is not simply a private entity. Lafayette Yard s bonds have been issued on behalf of the City and are backed by the City s guarantee. (pp. 16-17) 3. This case is about whether Lafayette Yard performs a governmental function under OPMA such that the rights, duties, obligations, privileges, benefits, or other legal relations of any person are affected. We find that Lafayette Yard does perform such a function and is a public body subject to OPMA. (pp. 17-18) 4. The Appellate Division determined that application of the public trust doctrine to the facts of this case would lead to the conclusion that Lafayette Yard is subject to OPMA. We express no opinion on that determination. (p. 18) 5. Under OPMA, an entity also may be deemed, a public body, pursuant to N.J.S.A. 10:4-8a, if it is collectively authorized to spend public funds. To the extent that public funds, through the commitment of the City, have been put at risk, the OPMA alternative test has been met. (pp. 19-21) 6. The Times has asserted that Lafayette Yard is an instrumentality or agency created by a political subdivision and that the Corporation is therefore subject to OPRA. The Appellate Division agreed for essentially the same reasons and ordered the minutes of the Board meetings to be made available for inspection, copying and examination in accordance with OPRA. We also agree. (p. 21) 7. Lafayette Yard claims that it was created by public-spirited citizens who incorporated as a private nonprofit entity to assist the City in redeveloping 3.1 acres in its redevelopment plan. That claim is true as far as it goes. To accept it without further discussion would be to elevate form over substance to reach a result that subverts the broad reading of OPRA as intended by the Legislature. Suffice it to say that the Mayor and City Council have absolute control over the membership of the Board of Lafayette Yard and that the Corporation would only have been created with their approval. That the conditions under which Lafayette Yard operates are dictated by IRS Revenue Ruling 63-20 and Revenue Procedures 82-26 is beside the point; the effect is that Lafayette Yard is subject to the requirements of OPRA. (p. 23) 8. Lafayette Yard maintains that it was created to assist the City unencumbered by the various bureaucratic burdens endemic to public entities. We express no view as to other burdens imposed on government or whether they apply to Lafayette Yard. We hold only that Lafayette Yard is bound by OPMA and OPRA. (p. 24) The judgment of the Appellate Division is AFFIRMED as MODIFIED. The matter is REMANDED for further proceedings consistent with this opinion. JUSTICES LONG, LaVECCHIA, ZAZZALI, ALBIN, WALLACE and RIVERA-SOTO join in CHIEF JUSTICE PORITZ S opinion. Plaintiff-Respondent, v. LAFAYETTE YARD COMMUNITY DEVELOPMENT CORPORATION, Defendant-Appellant. Argued January 3, 2005 Decided June 15, 2005 On certification to the Superior Court, Appellate Division, whose opinion is reported at 368 N.J. Super. 425 (2004). Rocky L. Peterson argued the cause for appellant (Hill Wallack, attorneys; Mr. Peterson and Dakar R. Ross, on the briefs). Keith J. Miller argued the cause for respondent (Robinson & Livelli, attorneys). CHIEF JUSTICE PORITZ delivered the opinion of the Court. The essential facts of this case are not in dispute. A reporter for The Times of Trenton Publishing Corporation (The Times) was not permitted to attend various board meetings of Lafayette Yard Community Development Corporation (Lafayette Yard or Corporation) and, further, was denied access to the minutes of those meetings. The Times filed a complaint against the Corporation claiming that the provisions of the Open Public Meetings Act, N.J.S.A. 10:4-6 to -21, and the Open Public Records Act, N.J.S.A. 47:1A-1 to -13, govern access to the meetings of the Corporation s Board of Trustees (Board or Trustees) and to the minutes of those meetings. We hold today that Lafayette Yard is subject to both statutes because it is a public body that perform[s] a governmental function within the meaning of N.J.S.A. 10:4-8a, and because it is an instrumentality or agency created by a political subdivision under N.J.S.A. 47:1A-1.1. [t]he governmental unit on whose behalf the nonprofit corporation is issuing the [tax-free] obligations [must] . . . appoint[] or approve[] the appointment of at least 80 percent of the members of the governing board of the corporation, and . . . [must have] the power to remove, for cause, . . . any member of the governing board and appoint a successor. Those requirements, and others, are set forth with specificity in Lafayette Yard s Certificate of Incorporation and in its Bylaws. By way of example, five of the Corporation s seven uncompensated Trustees were initially selected by the Mayor (with two named later by the City Council), whereas subsequent vacancies on the Board were required to be filled by the Mayor and approved by the City Council. See footnote 1 Any Trustee may be removed for cause by (a) a majority vote of the entire Board, or (b) by a majority vote of the City Council of the City approved by the Mayor of the City. Indeed, any amendment to the Bylaws also must be approved by the Mayor. Further, once the debt issued by the Corporation is retired, or in the event that the Corporation is dissolved, the Corporation is required to convey its assets to the City. On completion of construction, however, the parking garage was to be transferred to the Trenton Parking Authority, and the hotel and conference center, described in the record as the Trenton Marriott Hotel and Conference Center, were to be retained by the Corporation until retirement of its debt. See footnote 2 [t]he City agree[d] to accept full legal title to the Project financed by [Lafayette Yard] upon payment of the Bonds, the Subordinate Loans and the Unsecured Loans, and any related amounts required in connection with the payment or defeasance thereof. The final piece in the legal structure designed to facilitate the redevelopment project was completed on April 1, 2000, when the City and Lafayette Yard entered into a Bond and Subsidy Agreement (Subsidy Agreement) that had been approved by Resolution No. 00-139 on March 14, 2000. By the Subsidy Agreement, the City . . . agree[d] to guarantee unconditionally the punctual payment of the principal of and the interest on the Bonds, regardless of whether the interest [was] taxable or tax-exempt for Federal and State income tax purposes, by providing for payments to the Corporation on a semiannual basis . . . to assure that the Debt Service Reserve Fund [was] maintained for such Bonds at the level equal to the Debt Service Reserve Requirement as defined therein. The aggregate principal amount of Bonds [was] not [to] exceed $31,000,000. The full faith and credit of the City [were] pledged for the full and punctual performance of [the] Agreement. And, [t]he Corporation agree[d] to apply the proceeds derived from the sale of the Bonds for Costs associated with the Project . . . . The rationale for the City s commitment of its credit was to enhance the success of the redevelopment project by attracting investors who, in the event that the project s revenues proved insufficient to cover the principal or interest on the bonds, would receive payment from the City. With that understanding, Lafayette Yard issued $33,770,000 in tax-exempt bonds, varying in principal amounts and maturity periods, to fund the hotel, conference center and parking facility. [a]rrange or contract with public agencies or redevelopers for the planning, replanning, construction, or undertaking of any project or redevelopment work, or any part thereof; [and] negotiate and collect revenue from a redeveloper to defray the costs of the redevelopment entity. Here, the City has contracted directly with Lafayette Yard, the redeveloper, but has chosen not to issue debt to finance the project directly. Rather, the City and the Corporation, by agreement, have structured their relationship to take advantage of IRS Revenue Ruling 63-20 and Revenue Procedure 82-26. that the right of the public to be present at all meetings of public bodies, and to witness in full detail all phases of the deliberation, policy formulation, and decision making of public bodies, is vital to the enhancement and proper functioning of the democratic process; that secrecy in public affairs undermines the faith of the public in government and the public s effectiveness in fulfilling its role in a democratic society[;] and [that] it [is] the public policy of this State to insure the right of its citizens to have adequate advance notice of and the right to attend all meetings of public bodies at which any business affecting the public is discussed or acted upon in any way except only in those circumstances where otherwise the public interest would be clearly endangered or the personal privacy or guaranteed rights of individuals would be clearly in danger of unwarranted invasion. a commission, authority, board, council, committee or any other group of two or more persons organized under the laws of this State, and collectively empowered as a voting body to perform a public governmental function affecting the rights, duties, obligations, privileges, benefits, or other legal relations of any person, or collectively authorized to spend public funds. any paper, written or printed book, document, drawing, map, plan, photograph, microfilm, data processed or image processed document, information stored or maintained electronically or by sound-recording or in a similar device, or any copy thereof, that has been made, maintained or kept on file in the course of his or its official business by any officer, commission, agency or authority of the State or of any political subdivision thereof, including subordinate boards thereof, or that has been received in the course of his or its official business by any such officer, commission, agency, or authority of the State or of any political subdivision thereof, including subordinate boards thereof. THE TIMES OF TRENTON PUBLISHING CORPORATION, Plaintiff-Respondent, v. LAFAYETTE YARD COMMUNITY DEVELOPMENT CORPORATION, Defendant-Appellant. DECIDED June 15, 2005 Chief Justice Poritz PRESIDING OPINION BY Chief Justice Poritz CONCURRING/DISSENTING OPINIONS BY DISSENTING OPINION BY