Real Property & Environmental Law Alert

Real Property & Environmental Law Alert

Transactional Real Estate, Development/Redevelopment & Environmental Law

New Jersey Supreme Court Appoints Trial Court the Venue for Affordable Housing Disputes

Posted in Development/Redevelopment

Last week, the New Jersey Supreme Court issued a green light to developers and other interested parties to eventually pursue builders’ remedy actions in New Jersey Superior Court. The decision is the latest in a battle over affordable housing that has been in and out of the courts since the Mount Laurel decision in 1975. Most recently, in September 2013, the Supreme Court overturned the Council on Affordable Housing’s (“COAH”) latest attempt at adopting affordable housing regulations and ordered COAH to adopt new regulations within five months. That period was eventually extended to November 2014. COAH, however, did not adopt new regulations. Its inaction prompted a motion in aid of litigants’ rights, whereby parties to the prior action sought to break the bureaucratic logjam. Last week’s decision, designating trial courts as the venue for affordable housing disputes, is the New Jersey Supreme Court’s solution to the logjam.

The Supreme Court recognized that “COAH has had fifteen years to adopt Third Round Rules as it is required to do in accordance with its statutory mission,” and, thus, refused to give COAH additional time. Instead, the Supreme Court dissolved the exhaustion of remedies provision of the Fair Housing Act and designated trial courts as the initial venues for determining whether municipalities have met their constitutional obligations to provide a realistic opportunity for affordable housing. In making such determinations, the Supreme Court referenced the First Round and Second Round COAH Rules as guidelines, as well as select provisions of the Third Round Rules that have been upheld by the courts. Thus, the courts, rather than COAH, will have the task of providing a substitute for “substantive certification,” to shield municipalities from builders’ remedy suits.

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Howard Geneslaw and Jason Tuvel to Speak at the 2015 Land Use Update

Posted in Development/Redevelopment

Howard D. Geneslaw, a Director in the firm’s Real Property & Environmental Department and Secretary of the Land Use Section of the New Jersey State Bar Association, will be participating, as both a moderator and speaker, at the upcoming 2015 Land Use Update on Wednesday February 25, 2015 in West Orange, New Jersey. Jason R. Tuvel, also a Director in the Gibbons Real Property & Environmental Department, will be a speaking when the same program is presented next month at the Legal Center in New Brunswick, New Jersey on March 18, 2015.

Mr. Geneslaw has served on the Board of Directors of the Land Use Section of the New Jersey State Bar Association since 2009. 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, New York, and Connecticut. He is a licensed Professional Planner in New Jersey and a member of the American Institute of Certified Planners (AICP). At the February 25 presentation of the program, Mr. Geneslaw will be moderating the entire program, as well as leading a panel discussion concerning ethical issues in the land use approval process.

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Governor Cuomo Proposes Major Changes to State Brownfield Cleanup Program

Posted in Development/Redevelopment

In his budget proposal unveiled on January 21, Governor Andrew Cuomo included recommendations that would significantly change the New York State Brownfield Cleanup Program.

Among the revisions he has recommended to the Legislature are the following:

  • The deadline for sites to obtain their Certificates of Completion (COCs) in order to be eligible for tax credits under the Program would be extended until December 31, 2025. However, sites currently in the Program will need to obtain their COCs by December 31, 2017 to qualify for the existing level of tax credits.
  • For sites admitted to the Program after April 2015, tangible property (development) credits would be available only for sites in environmental zones, sites where the projected cost of cleanup exceeds the value of the property as clean, or sites containing affordable housing. For sites meeting these criteria, tax credits would potentially be increased from current levels. However, sites not meeting these criteria would be ineligible for any type of development-related tax credit.
  • Tax credits available for site preparation (cleanup) costs would be retained, but new limits would be placed on what expenses would qualify for reimbursement.
  • The definition of “Brownfield Site” would be expanded to include any site which has levels of contamination above cleanup standards established by the Department of Environmental Conservation (DEC).
  • There would be a new, streamlined non-tax credit cleanup program for the sites not seeking tax credits.
  • DEC oversight costs would be eliminated for sites being cleaned up by parties not responsible for the original contamination; for other sites, DEC would be authorized to negotiate a reasonable, flat fee cost reimbursement.
  • Sites classified on the State Superfund list as “Class 2” (representing a significant threat to human health or the environment) would be eligible for admission to the BCP if being cleaned up by a party not responsible for the original contamination, and DEC can find no responsible party available to perform a cleanup.
  • Hazardous waste taxes and fees imposed by the State would be waived for sites being remediated pursuant to a Memorandum of Agreement between DEC and a municipality (e.g., under the New York City Voluntary Cleanup Program).

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5th Circuit Rules that Sale of Chemical is Not Disposal

Posted in Environmental & Green Issues

On January 14, the U.S. Court of Appeals for the 5th Circuit ruled that the sale of a useful chemical did not make the seller an “arranger for disposal” under Superfund, even where seller knew that some of that chemical would be spilled during its use.

Vine Street LLC v. Borg Warner Corp., 2015 BL 8885, involved the sale of dry cleaning machines and PCE, a dry cleaning fluid, by Norge, a predecessor of Borg Warner. Norge equipped the machines with water separators, which it knew were not 100% effective. It continued to work with the dry cleaner to reduce spillage by modifying the separators’ design. Nonetheless, contamination resulted, and Vine Street, a successor landowner, sued Borg Warner for contribution to the cost of cleanup. The District Court held Borg Warner liable for 75% of the cost of cleanup based on its knowledge that some contamination resulted from these sales.

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New Jersey’s Permit Extension Act Extended One Year

Posted in Development/Redevelopment

On Friday, December 26, Governor Christie signed into law a one year extension of New Jersey’s Permit Extension Act (“PEA”). As noted in our recent blog, the PEA previously was set to expire on December 31, 2014.

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 the end of 2012. The PEA was later amended to extend the tolling of the expiration of those approvals through the end of 2014. The further amendment enacted on December 26, designated as P.L.2014, c.84, tolls the expiration of those approvals through December 31, 2015, thereby providing projects with permits set to expire another year in which to move forward.

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New York State Brownfield Developments: Governor Cuomo Vetoes Tax Credit Extension; State Bar Recommends Reforms

Posted in Development/Redevelopment

On December 29, Governor Andrew Cuomo vetoed a bill that would have extended, until March 31, 2017, the deadline for sites in the New York State Brownfield Cleanup Program to finish cleanups in order to qualify for the Program’s tax credits. The current deadline is December 31, 2015.

The veto surprised many observers, since the Governor had earlier indicated that he would sign the bill.

Cuomo’s veto message noted that, while he has an “unwavering commitment to this program and its goals”, the extender did not make reforms to the Program that he considers necessary. He also noted that the bill contains additional bonding authority and appropriations for the State’s Superfund program which would have an “unplanned, direct impact on the current State fiscal plan.”

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No Specific Waiver, No Arbitration: Enforceability of Arbitration Provisions in New Jersey Real Estate Contracts in Doubt Following Dispenziere v. Kushner Cos.

Posted in Development/Redevelopment, Real Estate, Transactional Real Estate & Leasing

Companies doing business in New Jersey and accustomed to settling contract disputes through binding arbitration should carefully review their contracts – and carefully draft all future contracts – to ensure that each arbitration provision contains clear and unambiguous language that the parties are waiving their rights to sue in court. An arbitration clause stating that all disputes will be determined through binding arbitration, but failing to contain this explicit waiver, may not be enforceable in accordance with the recent holding by the Appellate Division in Dispenziere v. Kushner Cos.

The Dispenziere decision stems from a dispute between a real estate developer and purchasers of residential condominium units in a Perth Amboy development known as the Landings at Harborside. At issue was the enforceability of the arbitration clause contained in the purchase agreement, which in relevant part provided:

“[a]ny disputes arising in connection with this Agreement . . . shall be heard and determined by arbitration before a single arbitrator . . . [t]he decision of the arbitrator shall be final and binding. Costs of arbitration shall be borne equally between the Seller and the Purchaser. This clause shall survive closing of title.”

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Legislature Approves One-Year Extension of New Jersey’s Permit Extension Act

Posted in Development/Redevelopment

Our recent blog noted that New Jersey’s Permit Extension Act (“PEA”) was to sunset at the end of this year unless a further extension was enacted into law. On Thursday, December 18, both the Assembly and the Senate voted to approve a one year extension of the PEA. The legislation now awaits action by the Governor.

New Jersey’s Permit Extension Act (“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 through the end of 2012, expiration of various approvals necessary for development. The PEA was later amended in 2012, due to the then “current national recession,” to extend the tolling of the expiration of those approvals until December 31, 2014. Unless the Legislature approves a further extension, the PEA will sunset at the end of this year, posing a problem for projects which have not yet started construction, because their approvals may expire.

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Starting January 1, 2015 New York Households Will Be Required to Recycle E-Waste

Posted in Environmental & Green Issues

Beginning January 1, 2015, any New Yorker who disposes of an old computer, television, or even an iPod, i.e., “electronic waste” (“e-waste”), by placing that item in the garbage or leaving it on the curb for collection will be in violation of the New York State Electronic Recycling and Reuse Act, N.Y. Envtl. Conserv. Law § 27-2601, et seq.. Individual consumers will instead be required to recycle such e-waste by dropping it off at a registered e-waste collector or by returning it to an e-waste manufacturer, or risk being fined $100 each time they fail to do so.

Although individual consumers in the State have never before had a legal obligation to recycle e-waste, the application of New York’s e-waste recycling mandate to individual households has been a long time in the making: The Act itself was signed into law on May 28, 2010, and the provisions within the Act requiring all businesses to comply with the Act’s e-waste recycling requirements have been in effect since January 1, 2012. As such, it appears that the broader application of the Act to individual households will have limited impact on the greater New York business community. Either way, one thing is certain: any New Yorker who has resolved to be less wasteful in the New Year will have one more reason to honor that resolution. Residents of New York City can find a drop-off location with this interactive map. For residents outside of NYC, this interactive map will locate drop off locations. In addition, a list of sites in New York state, arranged by county is available here.

John E. Icklan is an Associate in the Gibbons Real Property & Environmental Department. Susanne Peticolas, a Director in the Gibbons Real Property & Environmental Department, co-authored this post.

Highlands Council Schedules Stakeholder Outreach Workshops and Will Accept Written Comments

Posted in Development/Redevelopment

The New Jersey Highlands Council has scheduled three Stakeholder Outreach Workshops to solicit public input on the Highlands Regional Master Plan (RMP) as part of its RMP Monitoring Program.  According to public notices issued by the Highlands Council, the workshops are intended to provide members of the public with an opportunity to learn more about the monitoring program and to provide input.  The notices also state, “[t]he Monitoring Program evaluates progress toward achieving the goals of the Highlands Regional Master Plan,” and “[t]he program requires identification of indicators and milestones to measure the impact of the Regional Master Plan on water resources, agriculture, housing, transportation, and economic development within the Highlands Region.” 

Pre-registration is not required, but space is limited and those attending will be asked to sign in.  Stakeholder Outreach Workshops are scheduled as follows: 

December 15, 2014 from 7:00 p.m. to 9:00 p.m.
County College of Morris, Student Community Center, Davidson Room
214 Center Grove Road, Randolph, NJ

January 12, 2015 from 7:00 p.m. to 9:00 p.m.
Sussex County Technical School, Cafeteria
105 N. Church Road, Sparta, NJ

January 14, 2015 from 7:00 p.m. to 9:00 p.m.
Oldwick Fire Company Social Hall (across from Melick’s Town Farm)
163 Oldwick Road (Routes 523/517), Oldwick, NJ

Any schedule change due to weather conditions will be announced on the Council’s website.

The Highlands Council is also accepting comments via its website (click “Submit Comments” in the RMP Monitoring section of the homepage), or by hard copy to the Highlands Council office via regular mail, hand delivery or fax.  Those submitting written comments are asked to identify a specific content area or aspect of the RMP and include the commenter’s name and affiliation.  Comments will be accepted through February 27, 2015, and should be directed to:

New Jersey Highlands Council
Attn: 2014 RMP Monitoring Program
100 North Road (Route 513)
Chester, NJ 07930-2322
Fax: (908) 879-4205

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