Winne Banta attorneys R. N. Tendai Richards and Michael J. Cohen scored a victory in the New Jersey Appellate Division after the court affirmed a trial court ruling on behalf of the firm’s client, the North Hudson Sewerage Authority, against a developer. The developer, which demolished an existing structure on the Weehawken pier, and constructed a new 236-unit residential building in its place, challenged the sewerage authority’s assessment of a $1.15 million sewer connection fee. According to the developer, the Sewerage Authority was not authorized to assess a connection fee because the demolition of the existing structure and construction of a new building constituted only a change in use or an increase in sewerage flows, neither of which warranted such a charge. The Appellate Division disagreed, and recognized the firm’s argument on behalf of the sewerage authority that a sewer connection fee has two components: the cost of the physical connection and an amount representing a fair payment by the connector toward the cost of the system. Moreover, the Appellate Division agreed that the developer’s rationale would lead to absurd results, and would allow developers to game the system, while simultaneously depriving sewer authorities of the capital necessary to operate their systems. This is because, under the developer’s logic, once a property is connected to a sewerage system, the sewerage authority can never again assess a connection fee, regardless of further development on the site. Thus, a developer that acquires an old shanty located on valuable waterfront property, so long as the shanty was once connected to the sewer system, could never be charged a connection fee by the sewerage authority, regardless of what the developer ultimately builds in its place. This would place other users of the authority’s system in the position of subsidizing the developer, rather than the developer paying its proportionate share of the system’s cost.
