The issue before us, one of first impression, is whether the Newark Board of Education (School Board) needs prior approval of the Commissioner of Education under the Educational Facilities Construction and Financing Act (EFCFA), N.J.S.A. 18A:7G-1 to -48, to pursue Superior Court litigation to enforce its contractual reversionary rights to property it transferred to the Newark Housing Authority pursuant to a Site Disposition and Development Agreement (agreement). The agreement provided the School Board with rights of reversion if the property is not developed for "housing, redevelopment and economic development" purposes within three years of the school's transfer.
The School Board sued the Housing Authority and Friends of Team Charter Schools, Inc. (FTCS)—which purchased the property from the Housing Authority for use as a charter school—in the Chancery Division to enforce its reversionary rights because the property was not used in accordance with the agreement.
After FTCS's motion to dismiss was denied, it petitioned the Commissioner to require that the School Board obtain the Commissioner's approval under the EFCFA before the School Board can litigate its purported reversionary rights. The Commissioner denied relief, deciding that the School Board's litigation to reclaim ownership was "neither a school facilities project nor a land acquisition as contemplated under EFCFA and the related regulations; and that neither EFCFA nor the related regulations required [the School Board] to seek approval from the Commissioner prior to initiating the enforcement litigation." The Commissioner added the EFCFA would only take effect if the School Board reacquired the property and used it for a school facilities project.
We conclude that under our standard of review, the Commissioner's decision was not arbitrary, capricious, or unreasonable because the Commissioner properly interpreted the EFCFA. The Commissioner did not–– nor do we––determine whether the School Board has reversionary rights to the property through its agreement with the Housing Authority. That must be decided in the School Board's pending Superior Court litigation.