Regardless of whether the City of Passaic or any duly constituted City board, agency or department is acting in or pursuant to the performance of a governmental or proprietary function, any municipally owned, operated or controlled building, structure, facility or use, either existing or proposed, shall be permitted in any class of zone as set forth in this chapter, it being the intention of this subsection that whatever the City may authorize to do shall constitute a functional government and that whenever the City shall act, pursuant to granting authority, it acts as government and not as a private entrepreneur.