CAMDEN PLAZA PARKING, INC., A NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT, v. CITY OF CAMDEN, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT. WILLIAM H. HEISER AND MARY C. HEISER, PLAINTIFFS-APPELLANTS, v. CITY OF CAMDEN, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY; NEDMAC ASSOCIATES, INC., A CORPORATION; AND CAMDEN PLAZA PARKING, INC., A NEW JERSEY CORPORATION, DEFENDANTS-RESPONDENTS.
Supreme Court of New Jersey
Argued June 28, 1954—Decided June 28, 1954.
16 N.J. 150
Mr. Norman Heine argued the cause for respondent City of Camden (Mr. Joseph Cowgill, of counsel).
Mr. Joseph W. Cowgill argued the cause for respondent Nedmac Associates, Inc. (Mr. C. Zachary Seltzer, of counsel).
The opinion of the court was delivered by
WILLIAM J. BRENNAN, JR., J. The Camden Central Business District is in immediate need of additional off-street parking facilities and that need will be substantially greater in the near future when a proposed new department store is erected on the Old Court House site close by the City Hall Plaza, a municipally-owned area designated “Roosevelt Plaza” by resolution of the municipal governing body adopted October 29, 1936.
A Traffic and Parking Study of the Central District, prepared in December 1953 for the City of Camden by firms of architect-engineers and management consultants, showed that the then existing deficiency in the area of 250 spaces of off-street parking facilities would be increased to 1,250 spaces upon the opening of the new department store. The study
Shortly thereafter, in March 1954, the City of Camden entered into a written agreement with the interests about to construct the department store “to take the necessary steps to construct or procure the construction * * * of a multi-storied structure * * * for off-street parking * * * that will accommodate approximately one thousand (1000) automobiles, which structure shall be substantially similar in design and construction to that shown upon the December, 1953 study * * *.”
Not desiring to finance the construction cost, the city evolved a plan for selling a 50-year leasehold in the city-owned land to the highest responsible bidder who would undertake the construction of the multi-story structure at its own expense, title upon completion, however, to vest in the city, subject only to the leasehold. A resolution was adopted by the governing body on March 11, 1954, directing the advertising of the sale and setting forth the terms of bidding. Two bids were received and opened on the sale date, April 20, 1954. One bid was that of Nedmac Associates, Inc., and the other that of Camden Plaza Parking, Inc. The bid of Nedmac Associates, Inc., was accepted by resolution adopted April 22, 1954.
Camden Plaza Parking, Inc., the unsuccessful bidder, promptly filed an action in lieu of prerogative writ against the city asking a judgment setting aside the award to Nedmac
Thereafter, on May 20, 1954, a taxpayers’ action in lieu of prerogative writ was brought by William H. and Mary C. Heiser against the City of Camden, Nedmac Associates, Inc., and Camden Plaza Parking, Inc. Included in the relief sought is “that the action taken by the City of Camden in connection with the passage of the Resolution, the advertisement and the award of the bid to Nedmac Associates, Inc., be declared illegal and void.” The Heisers moved for and on June 16, 1954 were denied a temporary restraint pending trial staying the taking of “any proceedings or steps whatsoever under or by virtue of the Resolution of the City of Camden adopted April 22, 1954.” We of our own motion certified the appeal of the Heisers from that order.
The appeals were orally argued on June 28, 1954, after which we directed the setting aside of the summary judgment and, to the extent that it denied the temporary restraint, of the order of June 16, 1954, and directed the remand of the consolidated action with direction to enter judgment vacating and setting aside the resolutions adopted by the city on March 11, 1954 and April 22, 1954, and declaring illegal and void all proceedings and actions taken thereunder. We also announced that this opinion would be prepared and filed in due course. Cf. Schlossberg v. Jersey City Sewerage Authority, 15 N.J. 360 (1954); Stevenson v. Gilfert, 13 N.J. 496 (1953).
Action by a municipality to relieve traffic congestion through the establishment of off-street public parking facilities is the exercise of a public and essential governmental function, and publicly-owned lands used for such purposes are devoted to a public use. The parking crisis in the modern day threatens the very welfare of the community, and statutes and court decisions recognize that public lands employed by
But municipalities have only such powers as are given them by the Legislature and in authorizing municipalities to provide public off-street parking facilities the Legislature has not seen fit to authorize the leasing of mu-
A lease arrangement substantially like that involved here was sustained by the Supreme Judicial Court of Massachusetts in Lowell v. City of Boston, 322 Mass. 709, 79 N. E. 2d 713 (1948), appeal denied in Pierce v. City of Boston, 335 U. S. 849, 69 S. Ct. 84, 93 L. Ed. 398 (1948),—but under a statute which expressly authorized the City of Boston to lease to a private corporation a portion of the subsurface of Boston Common and the Public Garden to be used as a site for an underground parking garage for use by the public. The court found that Boston did not, as claimed by objectors, originally take the land under any trust which prevented the
The city argues that statutory authority for the proposed lease is to be found in
The city contends that City Hall Plaza is not held presently in a governmental capacity but in a proprietary function and, citing Southeastern Greyhound Lines, Inc., v. City of Lexington, 299 Ky. 510, 186 S. W. 2d 201 (Ct. of App. of Ky. 1945), argues that, like property purchased or condemned for a public purpose, but which has not been dedicated to such use,
The plaintiffs in both suits argued their appeals on the premise that if the proposed leasehold arrangement was within the city‘s power to make, the award to Nedmac Associates, Inc., must nevertheless be set aside for alleged deficiencies in the invitation for bids. The insistence is that the city could not legally enter into the arrangement without first advertising for bids under
The unsuccessful bidder, Camden Plaza Parking, Inc., has no standing to make this attack. Waszen v. City of Atlantic City, 1 N.J. 272 (1949). But the Heisers, as citi-
We agree that the vagueness and ambiguities of the terms for bidding set out in the city‘s advertisement, which largely incorporates the provisions of the resolution of March 11, 1954, particularly as to the form of the bond to be furnished and the specifications of the multi-storied structure called for, and the uncertainty whether the bid form required to be used by bidders called for the offer of a fixed rental only or permitted a bid based upon a percentage of receipts, compel the conclusion that the specifications for bids fall far short of the requirements that such specifications shall be sufficiently full and explicit to notify prospective bidders of the kind and nature of the subject of the contract and set up a common standard of competition, in short, supply such information as will afford all bidders a fair and reasonable opportunity for competition and enable them to bid intelligently. See McQuillin, Municipal Corporations, 3d ed., vol. 10, sec. 29.52, p. 308; Waszen v. City of Atlantic City, supra; Wilmington Parking Authority v. Ranken, — Del. —, 105 A. 2d 614 (Sup. Ct. 1954).
The city insists, however, that the proposed leasehold is not a contract subject to
The taxpayers also argue that the leasehold arrangement contemplates construction of a building subject to
The consolidated action is remanded to the Law Division with direction to vacate and set aside the summary judgment entered May 6, 1954, and the order of June 16, 1954 to the extent that it denies the temporary restraint, and to enter a final judgment against the City of Camden and Nedmac Associates, Inc., vacating and setting aside the resolutions adopted by the City of Camden on March 11, 1954 and April 22, 1954, and declaring illegal and void all proceedings and actions taken thereunder.
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-
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 the 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,
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
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,
The 1947 Constitution,
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 County of SanFrancisco 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
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
But it is requisite that there be a bona 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, WACHENFELD, BURLING, JACOBS and BRENNAN—6.
For affirmance—Justice HEHER—1.