Court Opinion

ID: 9884829
Source: CourtListenerOpinion
Date Created: 2023-10-06 03:16:00.76496+00
Date Added: 2024-06-11T07:48:41.061981
License: Public Domain

Heher, J.
(dissenting). The basic inquiry here is whether the proposed lease of municipal lands would be ultra vires the municipality and void, and this involves the question of whether it would constitute an exercise of power compre*161hended in R. S. 40:60-42 and R. S. 40:176-12, the latter applicable to second-class cities. The former act empowers all municipalities to lease for “fixed and limited terms” to “any person” any land or building “not presently needed for public use”; and if any portion of a building owned by it is “not presently needed for the use of the municipality,” the local governing body may rent such portion for “private purposes” to the.person “who will pay the highest rent therefor, for any use not detrimental to such building or the use of the remainder by the municipality.” And the latter statute authorizes cities of the second class to lease to “any person” any land and building “not needed for public use” for a fixed term not exceeding 50 years.
The majority holds the view that the “construction and operation of the proposed public owned parking facility upon the publicly owned tract” constitutes the “use of the land” a “public use,” even though the facility is “privately constructed and operated under the lease from the city,” and so the cited statutes are inapplicable “since the tract does not satisfy the description of land 'not presently needed for public use’ or 'not needed for public use.’ ” And it is deemed significant that the particular plot, “in part at least,” has been in use as a “public” off-street parking lot, “partially metered and partially operated by a private lessee,” and so devoted to a “public use” which the proposed structure will “merely substantially enlarge,” and hence does not meet the asserted statutory test. It is said, in sum, that the “emphasis is on the need for the land for public use when its leasing is attempted,” and here tjie city’s “own resolution * * * establishes unequivocally that the land is imperatively needed for use as a substantially enlarged public off-street parking facility,” and thus “the present need of the land for public use is conclusively demonstrated.”
But these, I submit, are illusory considerations. The city is under no duty whatever to provide off-street parking facilities, either as a governmental or a local proprietary function, under L. 1942, c. 138, N. J. S. A. 40:60-25.1, or *162to undertake the construction of such facilities as a local improvement under L. 1949, c. 261, N. J. S. A. 40:56-1.1, or to organize an authority under the Parking Authority Law, L. 1948, c. 198, N. J. S. A. 40:11A-1, et seq., as the only statutory mode hy which municipally-owned lands “may be leased to private persons to construct and operate a public off-street parking facility.” These are permissive measures merely.
The city may, as it proposes here, lease its lands not otherwise needed for public use, governmental or otherwise, as a means of placing the provision of off-street parking in private hands for operation in competition with all other such facilities in the community. To hold that the prior use of a part of this plot for street-level parking, most if not all of the time under private management, and the contemplated use under the proposed lease for off-street parking commensurate with the public need, renders the land unleasable for that very use as land presently needed for a “public use,” is to give the statute an unrealistic interpretation, at variance with what I conceive to be its obvious reason and spirit.
This is a contractual arrangement which is to be judged by its consequences. Although it will serve what is deemed to be a public need, it is essentially a private enterprise by the lessee, financed and sustained by private capital, and managed and operated, not by the municipality or a municipal agency such as a parking authority, but by private interests alone. By this plan, the municipality is not obliged to incur capital expenditures, directly or through an authority. And it is absolved of the burden and responsibility of management in the proprietary field. The choice of policy and means was the city’s; and there is no suggestion of unreasonable or arbitrary action or abuse of power, of which more hereafter. The use of the authority technique is optional and in no sense exclusive. The primary design of this device is the financing of the project in hand without unduly restricting the local subdivision’s borrowing power. The lessee’s fulfillment of the contractual undertaking is no more a “public use” than *163the provision of numerous other services rendered by private enterprise of much greater importance to the public weal, indeed indispensable, such as are provided by public utilities and the like, all financed and supported by private capital and directed by private management. It is pertinent to note that here the lease contract contemplates the use of part of the proposed parkade for strictly private businesses of various kinds unrelated to parking.
If a municipality may lease to a private person for a strictly private use lands not needed for a “public use,” and there can be no doubt of this, indeed so much is conceded to be within the cited express legislative grant of power, then, a fortiori, it may lease lands for the provision of off-street parking facilities by private enterprise to supplement the selfsame service rendered by other private interests in the community. Can it be that the municipality is without power to contract for such service by the use of its lands unneeded for other public purposes? A parking authority created by the municipality under the Parking Authority Law, N. J. S. A. 40 :llA-4, becomes an “agency and instrumentality” of the municipality; and the agency is given the power, section 40:llA-6(6) (e), “to construct, improve, maintain, operate, own, lease either in a capacity of lessor or lessee of land and facilities to be devoted to the parking of vehicles of any kind.” The power of the creator municipality in this regard can hardly be less than its agent for such service. This would seem to be axiomatic. What is proposed here is but an incident of the municipality’s province to render parking service, and to devote the particular lands to that use. And this conforms to the legislative concept. When R. S. 40:60-42 and R. S. 40:176-12 came into being, L. 1917, c. 152, Art. XVIII, sec. 4, 10, L. 1930, c. 143, the provision of off-street parking was not deemed a matter of public concern, and the subject matter of the present inquiry was not in the legislative view. The rapid increase in the volume of motor vehicle traffic gave rise to problems related to inadequate parking facilities; and the first of the statutory remedial *164measures came in 1942, when the Legislature, L. 1942, c. 138, N. J. S. A. 40:60-25.1, authorized the various municipalities to provide parking facilities, and was followed in 1948 by the Parking Authority Law, L. 1948, c. 198, N. J. S. A. 40:11A-1, et seq., vesting in the local authority as a municipal agency the power to lease its lands and parking facilities, thereby characterizing the function as private or proprietary or one that may be treated as such by the municipality. Justice Cardozo speaks of the problem of distinguishing between municipal activities governmental in nature and those corporate or private in character as one meriting legislative attention. 35 Harv. L. Rev. 113, 120. See, also, 34 Harv. L. Rev. 66; 38 Harv. L. Rev. 793, 795. The Legislature has spoken here. The provision of off-street parking facilities is a municipal function that may be fulfilled by private enterprise. And here the project involves the continuation not the frustration of the particular use.
The 1947 Constitution, Art. IY, sec. VII, par. 11, directs that the provisions of that instrument and of any law concerning municipal corporations formed for local government, or concerning counties, “shall be liberally construed in their favor”; and the powers of counties and municipal corporations shall include not only those granted in express terms, but also those of necessary or fair implication, or incident to the powers expressly conferred, or essential thereto, and not inconsistent with or prohibited by this Constitution or by law.”
The principles and cases are treated in the annotation in 8 A. L. R. 2d 373, 389, 396. See, in particular, Blank v. Browne, 216 App. Div. 624, 216 N. Y. Supp. 664 (1926). There, the New York Appellate Division sustained the action of municipal park authorities in leasing to a private individual, for operation as a public parking place, a municipal park of about 14 acres which for some years had been operated by the park authorities as a public parking place for the convenience of the public patronizing an adjacent larger park and boardwalk. Compare City and Bounty of San *165Francisco v. Linares, 16 Cal. 2d 441, 106 Pac. 2d 369 (Sup. Ct. 1940); Lowell v. City of Boston, 322 Mass. 707, 79 N. E. 2d 713 (Sup. Jud. Ct. 1948), appeal dismissed in Pierce v. City of Boston, 335 U. S. 849, 69 S. Ct. 84, 93 L. Ed. 398 (1948). And see Dorsey v. Stuyvesant Town Corporation, 299 N. Y. 512, 87 N. E. 2d 541, 14 A. L. R. 2d 133 (Ct. of App. 1949), certiorari denied 339 U. S. 981, 70 S. Ct. 1019, 94 L. Ed. 1385 (1950), where the distinction is made between governmental function and action and the function of private enterprise; also Philadelphia Rapid Transit Co. v. United States, 8 F. Supp. 152 (Pa. D. C. E. D. 1934), holding that income earned by a public utility corporation operating a transportation system under a contract with a city, whereby the latter shared equally in the net earnings above a fixed percentage on the capital stock of the corporation and had certain other rights in its management and policies, is not exempt from federal income tax in respect of the portion to which the corporation was entitled under the contract.
Indeed, the plaintiffs in the taxpayers’ suit acknowledge the existence of the basic power, but insist that its exercise is subject to the competitive bidding formula laid down in R. S. 40:50 — 1.
This statutory direction has no application here. It calls for competitive bidding where the contract involves “the doing of any work” or “the furnishing of any materials, supplies or labor, or the hiring of teams or vehicles,” and the “sum to be expended exceeds” $1,000. The lease contract proposed here does not fall into any of these categories.
And it does not matter that competitive bidding was invited. There is in such circumstances no duty to accept the bid that has priority under the terms of the invitation. Peter’s Garage, Inc. v. City of Burlington, 121 N. J. L. 523 (Sup. Ct. 1939), affirmed 123 N. J. L. 227 (E. & A. 1939).
Moreover, while there was not a common definitive standard placing the bidders on an equal footing, the unsuccessful bidder has no standing to complain for the further reason *166that, though tendering the bid as a corporate body, it had no corporate existence either at the time of submission or the time of the award, nor was it a de facto corporation. And so there was but one bidder.
But it is requisite that there be a Iona fide exercise of the power to lease. The terms must be fair and just, and the action untainted by bad faith. There is no basis in the proofs for a finding that these criteria of conduct were disregarded by the governing body. It is suggested that there was a design to “stifle” bidding; but this is pure surmise unsupported by evidence. The plaintiffs themselves disavowed an intention to impute bad faith to the local rulers.
I would sustain the resolution under review and dismiss the complaint.
For reversal — Chief Justice Vanderbilt, and Justices Oliphant, Wacheneeld, Burling, Jacobs and Brennan— 6.
For affirmance — Justice Heher — 1.