Real Property & Environmental Law Alert

Real Property & Environmental Law Alert

Transactional Real Estate, Development/Redevelopment & Environmental Law

NJ High Court Clarifies Standard for Revocation of Direct Access to State Highway from Commercial Property

Posted in Development/Redevelopment

In its recent decision in In Re Revocation of the Access of Block #613, the New Jersey Supreme Court clarified the standard governing the revocation of direct access from a State highway to a property used for commercial purposes under the State Highway Access Management Act and the State Highway Access Management Code. The case outlines the requisite procedure for revocation of a commercial property’s direct access to a State highway by the New Jersey Department of Transportation (NJDOT).

NJDOT sought to widen Route 166 in Toms River in an effort to increase safety, traffic capacity, and movement on the roadway. Arielle Realty, LLC, a commercial tenant, conducted business on a property at the corner of Route 166 and West Gateway that had direct access to both streets. Arielle Realty objected to the road widening project because it would essentially eliminate its commercial property’s direct access to the State highway, in addition to eliminating eight of the property’s parking spaces located in an existing NJDOT right-of-way.

Continue Reading

Gibbons Director David Freeman Featured in The New York Environmental Lawyer

Posted in Environmental & Green Issues

David J. Freeman, a Director in the Gibbons Real Property & Environmental Department, was recently profiled in the Fall/Winter 2015 edition of The New York Environmental Lawyer for his achievements as a longstanding member of the Environmental Law Section of the New York State Bar Association.

A member of the Section for more than 30 years, Mr. Freeman serves as Co-Chair of both the Committee on Hazardous Waste/Site Remediation and the Section’s Brownfields Task Force. The Task Force played an important role in the passage of the State’s Brownfield Cleanup Act in 2003 and the amendments enacted in 2008 and 2015, and in monitoring and commenting on the implementation of the Act by the Department of Environmental Conservation. Mr. Freeman received the Section’s Distinguished Service Award in 2001.

Continue Reading

No Further Extensions of New Jersey’s Permit Extension Act

Posted in Development/Redevelopment

The state legislature took no action to further extend New Jersey’s Permit Extension Act (“PEA”) during the recently concluded legislative session, which means that permits and approvals extended by the PEA’s tolling period either have expired or will expire soon. Pursuant to the terms of the act, the expiration date for most approvals covered by the PEA are tolled through June 30, 2016, with certain approvals expiring before that date, making right now the time to evaluate projects approaching construction to determine which existing approvals were extended by the PEA, the exact expiration date of such approvals, and whether further extensions are available under other laws. After such an evaluation, developers and project managers can then determine whether approval rights can be fully vested prior to their expiration date and, if not, whether an extension, amendment, or renewal of the approval is required.

The PEA was initially enacted in 2008 in response to “the crisis in the real estate finance sector of the economy.” The purpose of the PEA was to toll the expiration of various approvals necessary for development through 2012. The PEA was later amended in 2012 and again in 2014, due to the then “current national recession,” extending the tolling of those approvals until December 31, 2015. The PEA provides for the tolling of any “approval,” as defined in the statute, which is or was in existence during the extension period (January 1, 2007 through December 31, 2015). Most subdivision, site plan, and variance approvals granted pursuant to the Municipal Land Use Law are encompassed within covered “approvals,” as are many approvals granted by the New Jersey Department of Environmental Protection (NJDEP), New Jersey Meadowlands Commission (NJMC), New Jersey Pinelands Commission, and various other state agencies. Caution, however: there are important exceptions to the general rule above, and some permits and approvals are expressly excluded from the tolling which the PEA provides. Continue Reading

Supreme Court Will Decide Whether State Can Face Liability Under Spill Act

Posted in Environmental & Green Issues

The New Jersey Supreme Court has decided to hear the State’s appeal of a September 2015 Appellate Division decision that held the State potentially liable for cleanup costs at the Raritan Bay Slag Site.

As we reported last fall, the Appellate Division held in NL Industries, Inc. v. State of New Jersey that the Spill Compensation and Control Act, which imposes liability upon both dischargers of hazardous substances and on parties “in any way responsible” for the hazardous substances, is applicable to the State. Under the Appellate Division’s ruling, the State could bear liability for all or some of the cleanup costs related to a seawall that was constructed using contaminated materials. The suit alleges that the State should be held liable because it owned the land under the seawall, approved its construction, issued a riparian grant to the developer that sought to build it, and issued a permit for it.

The Supreme Court granted the state leave to appeal on January 15, 2016.

Paul M. Hauge is Counsel in the Gibbons Real Property & Environmental Department.

Settlement Update on New Jersey Tax Court’s Closely-Watched AHS Hospital Decision

Posted in Development/Redevelopment

Several months ago, this blog reported on Judge Vito Bianco’s denial of Morristown Memorial Hospital’s (the “Hospital”) property tax appeal. While this was only a Tax Court decision, it was closely-watched because it had the potential to eviscerate the property tax exemption for modern integrated hospitals, and potentially for other nonprofit organizations with complicated corporate structures or relationships.

On November 11, it was reported that the Hospital entered into a global settlement with the town of Morristown, pertaining to a dispute over the Hospital’s property tax bill from 2006-2015. Under the agreement, the Atlantic Health System (“Atlantic Health”), owners of the Hospital, agreed to pay the town of Morristown $15.5 million dollars — including an upfront payment of $10 million — over the next 10 years. While Judge Bianco’s decision held that nearly the entire Hospital property was taxable, save for the limited exceptions of a visitor parking garage, fitness center, and auditorium located on site, under the settlement agreement, Atlantic Health will begin making annual tax payments on only approximately 25% of the Hospital’s property.

Continue Reading

NJ Legislature Considers Invalidating NJDEP Regulations

Posted in Environmental & Green Issues

On June 1, 2015, after significant outreach to the relevant stakeholders, the New Jersey Department of Environmental Protection (NJDEP) released for public comment sweeping proposed changes to the rules governing Coastal Zone Management (CZM), N.J.A.C. 7:7E-1.1 et seq., Stormwater Management (SWM), N.J.A.C. 7:8-1.1 et seq., and the Flood Hazard Area Control Act (FHACA), N.J.A.C. 7:13-1.1 et seq. However, the New Jersey Legislature is poised to use its constitutional authority to find that the proposed regulations are inconsistent with the legislative intent of the enabling statutes.

Since 2011, the NJDEP has sought to amend the complex and occasionally conflicting FHACA, CZM, and SWM rules in order to create a uniform regulatory policy regarding development in flood hazard areas, and the preservation of vegetation within riparian zones. On June 1, 2015, the NJDEP released for public comment the proposed regulatory changes. 47 N.J.R. 1041. Generally focusing on six main areas addressed by the FHACA, CZM, and SWM, the proposed rule changes would:

  1. Increase the amount of vegetation that may be disturbed within riparian zones and add additional methods of compensation for the disruption of vegetation, which reflects the NJDEP’s experience in permitting these activities;
  2. Repeal the special water resource protection area rules within the SWM and replace those regulations with the protections that exist under the FHACA, in order to create a uniform regulatory scheme;
  3. Give greater control within the FHACA and CZM rules to the local Soil Conservation Districts for mitigation of acid producing soil deposits in riparian zones;
  4. Clarify the forty-seven existing permit-by-rule provisions within the FHACA and add nineteen new permit-by-rule activities;
  5. Allow the NJDEP ninety calendar days to review general permit applications under the FHACA, and add nine new categories of general permits; and
  6. Streamline the permit programs administered by the Division of Land Use Regulation by, in addition to the foregoing, aligning the rules in a standardized format.

Continue Reading

New Jersey Appellate Court Rules Redeveloper Cannot Compel Amendments to Redevelopment Plan

Posted in Development/Redevelopment

Redevelopment agreements are the tool used to memorialize the respective obligations of the redeveloper and the municipality to effectuate a redevelopment project. Often, a concept plan has been agreed upon, but changes to the site-specific zoning embodied in the redevelopment plan are necessary in order for the project to advance. In an unpublished decision earlier this year, the New Jersey Superior Court, Appellate Division, ruled in Fieldstone Associates, L.P. v. Borough of Merchantville, A-1239-13T3, that the municipality cannot be contractually compelled to adopt such amendments.

The Borough of Merchantville, located in Camden County, designated portions of its downtown as an “area in need of redevelopment” and adopted a redevelopment plan. Following an RFP process, the Borough designated Fieldstone Associates, L.P., as the redeveloper and the parties entered into a redevelopment agreement which provided that “Redeveloper, in cooperation with Borough shall prepare documentation for amendments to the Redevelopment Plan deemed necessary by the Redeveloper to develop the Redevelopment Project in accordance with the Concept Plan.” It went on to explain that the “Borough has approved the Concept Plan for Redeveloper’s proposed redevelopment for the Project Site being in compliance with the intent of the Redevelopment Plan and Borough shall amend the Redevelopment Plan to establish zoning standards, including bulk regulations to permit development of the Project without the requirement of variances or waivers, consistent with the approved Concept Plan.” The Redevelopment Agreement also provided that the Borough and Redeveloper “shall cooperate with each other in all respects and shall use their best efforts to effectuate the purposes of this Agreement.” In particular, the Borough was obligated to “examine its master plan to the extent required to conform to the Redevelopment Plan,” and “consider the adoption of zoning with respect to the Project Area consistent with the Amended Redevelopment Plan…In the event that economic market or site conditions render the Redevelopment Project impractical or unfeasible, the Borough and Redeveloper shall cooperate to revise the Redevelopment Plan and Concept Plan to permit the uses and bulk standards reasonably necessary to develop an economically feasible redevelopment project….”

Continue Reading

New Year’s Eve All Night Alcoholic Beverage Permit Application Deadline Approaching in New York

Posted in Liquor Licensing

The New York State Liquor Authority (SLA) has announced on its webpage that the submission deadline for New Year’s Eve All Night Permit Applications is November 16, 2015. The SLA has outlined the criteria that will be considered in deciding whether to issue such permits. They include:

  • Timely filing of the application;
  • Licensee’s disciplinary history (including any pending charges); and
  • Whether, given the nature of the event, the licensee has adequate facilities and security plans in place.

The SLA advises that only one all night permit is required per licensed establishment, and that applications will not be accepted after the application deadline.

Howard D. Geneslaw is a Director in the Gibbons Real Property & Environmental Department.

No Safe Harbor: State Can Face Liability Under Spill Act

Posted in Environmental & Green Issues

Be careful what you wish for. That may be the message of the Appellate Division’s September 23 opinion in NL Industries, Inc. v. State of New Jersey, No. A-0869-14T3. Affirming a “thoughtful and erudite” 2014 Law Division opinion by Judge Douglas K. Wolfson, the appellate court held that the onerous liability regime of the 1976 Spill Compensation and Control Act (commonly known as the Spill Act), which imposes strict, joint, and several liability for cleanups on both the dischargers of hazardous substances and on the much broader class of parties “in any way responsible” for the hazardous substances, is equally applicable to the State. As a result, the State may be responsible for a portion of the remediation of a contaminated site on the shoreline of Raritan Bay that will likely cost more than $75 million.

The history of the “Raritan Bay Slag Site” goes back to the 1950s, when state and federal officials began to study ways to prevent shoreline erosion in Laurence Harbor. The State shared responsibility for the maintenance, operation, and inspection of the beachfill and levee structures that were eventually constructed.

Continue Reading

Jersey City Restriction on Chain Stores and Restaurants Could be Unconstitutional

Posted in Development/Redevelopment, Litigation

Jersey City, New Jersey’s second largest city, recently passed an ordinance that restricts “formula businesses” in certain neighborhoods. The ordinance defines a “formula business” as one which is “contractually obligated” to maintain certain “standardized characteristics” such as merchandise, menu items, design, signage, and trademarks. In other words, Jersey City is seeking to limit chain restaurants and stores from opening in certain city neighborhoods.

Steve Fulop, Jersey City’s Mayor and proponent of the ordinance, was quoted in news reports about the ordinance as saying “[w]e don’t want every retail space to become a Gap, TGI Fridays or a Starbucks”, and “[l]ook at New York, it’s just Starbucks after Duane Reade after Chipotle after (TGI Fridays).” Without the ordinance, according to the Mayor, Jersey City would be “an environment that doesn’t necessarily foster the creative class and foster an interesting place for people to want to live in.” A challenge to this ordinance would not be surprising – it is the first of its kind in New Jersey, according to the New Jersey Chamber of Commerce, which opposed the ordinance.

Continue Reading

Lexblog