Real Property & Environmental Law Alert

Real Property & Environmental Law Alert

Transactional Real Estate, Development/Redevelopment & Environmental Law

Potential Change Coming to NJ’s Economic Opportunity Act

Posted in Development/Redevelopment

The “New Jersey Economic Opportunity Act of 2013” overhauled New Jersey’s economic development programs. The Act retooled and substantially enhanced the State’s job creation and retention program known as the Grow NJ Assistance Program (Grow NJ), as well as the Economic Redevelopment Growth (ERG) Grant Program, the incentive program that provides gap financing to developers. As we wrote in Commerce magazine, Grow NJ and ERG improve New Jersey’s economic competitiveness with our neighboring states and may be game-changers for businesses and developers. After seeing the programs in action for under a year, the Legislature has revisited the programs to make technical changes and to further enhance NJ’s economic development arsenal.

In June 2014, the State Legislature approved legislation (Senate Bill 1551/Assembly Bill 3213) with strong bipartisan support in both chambers to amend various portions of the Grow NJ and ERG programs. The bill is currently being considered by Governor Christie and must be acted on by September 8, 2014. The key provisions include:

  • Making the transfer of tax credit more widely available by reducing the minimum amount of the credits that may be transferred from $100,000 to $25,000.
  • Clarifying a provision of the Grow NJ program concerning the standard of service generally accepted by custom or practice as full-time employment in a supermarket, grocery, or other similar retail industry, in order to encourage food purveyors to locate within Camden and Atlantic City.
  • Adding a new Grow NJ bonus credit of $1,000 for using a vacant space of 1,000,000 square feet of office or laboratory space available for occupancy for a period of over one year.
  • Adding a new Grow NJ provision that deems a project a “mega project” if it is in a southern county that is also in an area in need of redevelopment and invests $20 million and creates or retains 150 jobs.
  • Modifying the Grow NJ “net benefit test” to require a business to demonstrate that a capital investment would benefit both the State and the municipality in which the capital investment will be made;
  • Encouraging nonprofit development corporations to undertake development projects in the four designated “Garden State Growth Zones.”
  • Allowing the allocation of tax credits to the shareholders of New Jersey S corporations and New Jersey Qualified Subchapter S Subsidiaries that undertake projects in the Camden-Garden State Growth Zone.
  • Creating an incentive for the donation of substantial public infrastructure as part of certain redevelopment projects
  • Making technical changes and correcting the date from July 28, 2015 to July 28, 2018, by which the developer of a qualified residential project seeking an award of tax credits under the ERG program towards the funding of an incentive grant must submit a temporary certificate of occupancy for the project.

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Sixth Circuit Becomes Latest Federal Appeals Court to Rule That CERCLA’s Contribution and Cost Recovery Provisions Provide Mutually Exclusive Remedies to PRPs

Posted in Environmental & Green Issues

The United States Court of Appeals for the Sixth Circuit became the latest federal court of appeals to weigh in on the dichotomous nature of Superfund claims made under Sections 107 and 113 in the wake of the United States Supreme Court’s decision in United States v. Atlantic Research Corp., 551 U.S. 128 (2007). In Hobart Corp. v. Waste Management of Ohio, Inc., the Sixth Circuit held that Sections 107(a)(4)(B) and 113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601-9675, “provide mutually exclusive remedies,” an issue left open in Atlantic Research.

Generally speaking, whereas Section 107 allows a potentially responsible party (“PRP”) who has funded remediation of a contaminated site to file a cost recovery action against other PRPs within six years, Section 113 allows a PRP who has at least partially resolved its liability to the United States only three years to file a contribution action against non-settling PRPs. The court in Hobart found that a PRP must proceed under Section 113 if it meets one of that section’s statutory triggers, e.g., entering into an administrative settlement that at least partially resolves that PRP’s CERCLA liability to the United States.

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New Jersey Supreme Court Finds Neither Plan Approval Nor Complete Remediation are Prerequisites to a Spill Act Contribution Action

Posted in Environmental & Green Issues

In Magic Petroleum Corporation v. Exxon Mobil Corporation, the New Jersey Supreme Court held that a party funding remediation of a contaminated site may bring a contribution claim against other potentially responsible parties (“PRPs”) before completing remediation and prior to receiving the New Jersey Department of Environmental Protection’s (“DEP’s”) written approval of the remediation plan. In so doing, the Court has provided certainty, to a degree, to the environmental remediation process in New Jersey.

In Magic Petroleum, the DEP required Magic Petroleum Corporation (“Magic”) to remediate a contaminated site pursuant to the Spill Compensation and Control Act, (“Spill Act”) N.J.S.A. 58:10-23.11 to -23.24. While that remediation was ongoing, Magic sued PRP Exxon Mobil for contribution. The trial court dismissed Magic’s contribution claim after ruling that such a claim could only be filed following complete remediation of the site. The Appellate Division agreed, finding that because the DEP — and not the trial court — has jurisdiction to identify contamination, analyze the extent of discharge, and devise a cleanup strategy, and those findings are a prerequisite to a court’s allocation of liability among multiple responsible parties, dismissal of Magic’s contribution claim was proper.

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Gibbons Director Installed as Secretary of the Land Use Section of the New Jersey State Bar Association

Posted in Development/Redevelopment

Howard D. Geneslaw, a Director in the Gibbons Real Property & Environmental Department, was installed as Secretary of the Land Use Section of the New Jersey State Bar Association (NJSBA) at the section’s annual meeting, held during the NJSBA’s Annual Meeting and Convention in Atlantic City in mid-May. This position places Mr. Geneslaw in line to become Vice Chair of the section next year, and Chair of the section the following year.

The NJSBA’s Land Use Section reviews developments in land use law, including local and state development land use approval and denial processes, and attempts to reduce or eliminate costs and delays associated with these processes.

Mr. Geneslaw has served on the Board of Directors of the Land Use Section of the New Jersey State Bar Association since 2009, and, prior to becoming an attorney, was a planning consultant to municipal planning boards and developers. He is a licensed Professional Planner in New Jersey and a member of the American Institute of Certified Planners (AICP). His law practice focuses on real estate development, redevelopment and related issues, including litigation, as well as on alcoholic beverage and liquor licensing matters, in New Jersey and New York.

David J. Freeman to Chair Panel on Brownfield Reform at New York State Bar Association Environmental Law Section Fall Meeting

Posted in Development/Redevelopment, Environmental & Green Issues

David J. Freeman, a Director at Gibbons P.C., will chair a panel on reform of New York State’s Brownfield Cleanup Program at the Fall Meeting of the Environmental Law Section of the New York State Bar Association.

The panel will discuss the Governor’s and Legislature’s actions this year―passage of an extension of the tax credit aspects of the Program, without enacting underlying reforms―and what is likely to happen next year. It will feature such prominent experts as Edward McTiernan, General Counsel of the New York State Department of Environmental Conservation; Christopher Goeken, Director of Public Policy and Governmental Relations of the New York League of Conservation Voters; Darren Suarez, Director of Governmental Affairs of the New York State Business Counsel; Jody Kass, Executive Director of New Partners for Community Revitalization; Philip Bousquet, Partner at Bousquet Holstein; and Linda Shaw, Partner at Knauf Shaw.

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New York Court of Appeals Upholds Municipal Authority to Ban Fracking

Posted in Environmental & Green Issues

New York’s highest court dealt a blow to the hydrofracking industry on June 30 when it upheld, in a consolidated opinion in Matter of Wallach v. Town of Dryden and Cooperstown Holstein Corp. v. Town of Middlefield, the authority of municipalities to use their zoning powers to ban hydrofracking. The Court of Appeals held that provisions on the towns’ zoning ordinances that prohibited hydrofracking anywhere within their borders were not preempted by the “supersession clause” of the state’s Oil, Gas and Solution Mining Law (OGSML). That clause, said the Court, prevents municipalities from regulating the “how” of hydrofracking but does not bar them from limiting “where” it can take place.

Hydrofracking – or, more properly, hydraulic fracturing — uses pressurized fluids injected into wells to fracture underground rock formations and liberate natural gas trapped within the rock. The Marcellus Shale formation, which extends over a number of states including New York, contains significant amounts of gas, and therefore has attracted intense interest from energy companies. At the same time, concerns have been raised about hydrofracking’s environmental impacts, especially those related to chemicals in the pressurized fluids. Those types of concerns led the Town of Dryden, a rural community in Tompkins County, and the Town of Middlefield, which includes part of the Village of Cooperstown in Otsego County, to amend their zoning plans to ban hydrofracking. (Both towns argued that their zoning plans already banned hydrofracking because they did not list it as a permitted use.) The appellants, companies with interests in leases that would have permitted exploring and developing natural gas through hydrofracking, challenged the ordinances, arguing that they were preempted by the OGSML’s supersession clause. They failed in the trial court and the intermediate appellate court, and then presented their arguments to the Court of Appeals.

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NJDEP Clarifies Obligation to Remediate Contamination from Historic Pesticide Use

Posted in Development/Redevelopment

The New Jersey Department of Environmental Protection has more formally confirmed the scope of the responsibility to address historic pesticide use on commercial and industrial properties: namely that a party need not remediate historic pesticide use unless there is a land use change to residences, schools, child care centers and playgrounds. On June 20, 2014, the NJDEP published an additional notice for Response Action Outcomes, the written determination by a Licensed Site Remediation Professional that a remediation is complete, which specifically permits completion of a remediation without investigation of contamination from historic pesticide use. The notice would only apply to contamination from the application of such pesticides to, for example, a former orchard or farm, but not contamination from a discharge caused by the mixing, manufacturing or other handling of such chemicals. NJDEP approval is not required for an LSRP to use this notice.

This action by the NJDEP essentially adopts the recommendations contained in the final report of the Historic Pesticide Contamination Task Force issued during March 1999. That report recommended that former agricultural areas should be remediated prior to site development or if intensively used by children, but stopped short of broadly mandating such action for all sites that have already been developed. While remediating parties have previously relied on the recommendations of the task force, this RAO notice now eliminates any uncertainty about the necessity to remediate contamination from historic pesticide use on sites that have already been developed for commercial and industrial uses and will continue to be used for such purposes.

David A. Brooks is a Director in the Gibbons Real Property & Environmental Department.

New York Legislators PASS Extension of State Brownfield TAX CREDITS

Posted in Environmental & Green Issues

In the waning hours of this year’s legislative session, the New York State Assembly and Senate have passed identical bills extending the sunset date for tax credits under the New York State Brownfield Cleanup Program from December 31, 2015 to March 31, 2017. To qualify for such credits, sites must obtain their Certificates of Completion from the New York State Department of Environmental Conservation (DEC) by the sunset date.

As indicated in prior blogs, the Governor’s office and the Legislature have struggled mightily over the past several months to reach consensus on a comprehensive reform package for the Program. Their respective proposals contained many elements, including changing the definition of “brownfield site,” tightening eligibility standards for tangible property (development) tax credits, and establishing a streamlined cleanup program for sites not seeking tax credits.

Ultimately, consensus on exactly how to reform the Program proved elusive. The picture was complicated by the Assembly’s insistence on additional funding for Superfund cleanups and the Environmental Remediation Program, which the Governor has resisted for budgetary reasons.

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New Jersey Department of Environmental Protection Proposes New Rules Aimed at Streamlining Coastal Permitting Process

Posted in Environmental & Green Issues

On June 10, 2014, the New Jersey Department of Environmental Protection (“DEP”) introduced a series of proposed technical revisions to land use rules — via a 1,055 page proposal — designed to encourage redevelopment in coastal areas decimated by Hurricane Sandy. DEP Commissioner Bob Martin — who also served on Governor Christie’s Red Tape Review Commission, which was launched in 2011 to streamline regulatory processes across state government — explained that “[t]hese revisions will add clarity to our regulatory processes and provide better predictability in the regulatory process.”

One of the most significant developments that would flow from the NJDEP’s proposed revisions is the consolidation of the New Jersey Administrative Code’s Coastal Permit Program Rules (at N.J.A.C. 7:7) and Coastal Zone Management Rules (at N.J.A.C. 7:7E) — which are presently both relied on by the NJDEP to implement three separate New Jersey laws governing the use and development of the State’s coastal resources, namely: (1) the Coastal Area Facility Review Act (CAFRA), N.J.S.A. 13:19-1 et seq.; (2) the Wetlands Act of 1970, N.J.S.A. 13:9A-1 et seq.; and (3) the Waterfront Development Law, N.J.S.A. 12:5-1 et seq. — into one chapter of the Administrative Code (at N.J.A.C. 7.7).
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Gibbons Real Property & Environmental Practices Highlighted by Chambers USA

Posted in Environmental & Green Issues, Transactional Real Estate & Leasing

The Gibbons Real Property & Environmental Department, and seven of its attorneys, were among the 10 Gibbons practice areas and 27 individual attorneys ranked in the 2014 edition of the Chambers USA Guide to America’s Leading Lawyers for Business. Gibbons has appeared in the Chambers guide since its inception, and, for the past three years, Gibbons has also contributed the state overview for the New Jersey section of the publication. The firm’s Environmental Department ranked in Band 1 and Real Estate ranked in Band 2. Chambers annually rates the nation’s leading business lawyers and law firms through comprehensive interviews with top companies, attorneys, and business executives, plus extensive supplementary research.

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