Real Property & Environmental Law Alert : New Jersey, New York, Pennsylvania & Delaware Lawyers & Attorneys for Real Estate Development & Environmental Law

A standing-room only audience of more than 500 business owners, senior executives and industry representatives throughout the state attended a conference on August 19, sponsored by Gibbons P.C. and EisnerAmper LLP - Solar Energy for New Jersey Businesses, Developing & Financing Your Own On-Site Solar Facility - at the Woodbridge Hilton in Iselin, NJ.

The program (as covered by NJBIZ) featured elected officials, state representatives, and industry executives, who discussed the state of solar energy projects for business and other organizations in New Jersey - the second most active state for solar power installations and the seventh for venture capital investments in clean energy projects.

Speaking about real estate and development considerations affecting solar facility design and installation, Douglas Janacek, Co-Chair of the Gibbons Real Property & Environmental Department, emphasized the widespread desire of stakeholders to see construction of alternative energy facilities. In New Jersey, Mr. Janacek noted that there are a myriad of opportunities to locate solar facilities not just on new sites, but also existing, developed sites of all types and sizes.

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The compliance deadline for EPA’s 2008 lead paint rule, requiring contractors engaged in renovations of pre-1978 residences, schools and childcare facilities to be certified by April 22, 2010 was extended in June of this year in response to industry and congressional outcry. The reprieve was not sufficient for everyone. On July 8, the National Association of Home Builders, joined by other industry groups, filed suit against EPA seeking review of the final rule. In particular, they challenged EPA’s removal of the opt-out provision from the final rule.

As originally drafted, the rule provided for opting out of the lead paint rules for homes where there were no children under the age of 6 years. In the final version, the opt-out provision has been removed. According to NAHB Chairman Bob Jones,

About 79 million homes are affected, even though EPA estimates that only 38 million homes contain lead-based paint. Removing the opt-out provision extends the rule to consumers who need no protection.

The additional requirements for lead safety add an average of $2,400 to a project. Apparently EPA changed the rule without any new scientific data indicating a need. In a tight economy, it seems counterproductive to increase the cost of renovations without a clear benefit.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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In the most recent case decided in New Jersey on the issue of the adequacy of a land use public notice, the court continued the trend of requiring applicants on development applications to put as much information in their notices as possible to make the general public aware of the nature of the matter under consideration. In Neshanic Coalition for Historic Preservation v. Hillsborough Township Planning Board, Judge Buchsbaum ruled that the applicant’s public notice failed to meet the statutory requirement of setting forth the “nature of the matters to be considered” under the New Jersey Municipal Land Use Law because it omitted the fact that the building to be demolished was located in an historic district.

The court made this ruling despite the fact that the notice had properly identified:

• the size and location of the property,
• the dimensional variances being applied for, and
• the need for a stream corridor waiver.

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It has been almost two decades since the last edition of the State Environmental Quality Review Act (SEQR) Handbook was released by the New York State Department of Environmental Conservation’s (NYSDEC) Division of Environmental Permits. Despite significant amendments to the SEQR regulations, 6 NYCRR Part 617 in January 1996 and tens of hundreds of cases of distinction on SEQR substance and procedure, many land use and environmental practitioners have been left to fend for themselves without up-to-date technical regulatory guidance from NYSDEC until now.

For those who are unfamiliar with the SEQR Handbook, it is a practical reference guide for agencies, project sponsors and the public with respect to the procedures prescribed by the State Environmental Quality Review Act. It has a user-friendly table of contents and each topic in the handbook is addressed through question and answer format. The questions range from basic information such as “What is the Environmental Notice Bulletin (ENB)?” to “How should a generic environmental impact statement (EIS) address required content differently than a site or project specific EIS?” In addition, the handbook provides a roadmap of the Part 617 SEQR Regulations before and after the 1996 Amendments and several helpful charts including one which shows all of the relevant steps in the SEQR process, the number of calendar days in which those steps must be addressed and provides citations to the section of the regulations that govern each step. Although not available in hard copy, a .pdf version of the SEQR Handbook is available for download or printing from NYSDEC’s website. Get your copy today by clicking here.

Jennifer M. Porter is an Associate in the Gibbons Real Property and Environmental Department.

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Title review, like the negotiation of representations and warranties discussed in my earlier post, is an invaluable tool in determining whether to purchase a property. Analysis of the encumbrances recorded against the parcel is akin to reviewing a vehicle history report on a used car before you buy it. Both will tell you whether the item is a lemon.

At a recent presentation with co-panelists Michael Moyer of Land Services USA, Inc. and Aileen Schwartz of Hill International, entitled “Real Estate For In-House Counsel: An Examination of Title Issues, Contracts and Negotiations in Real Estate Deals” at the Association of Corporate Counsel (Delaware Valley Chapter)’s 2nd Annual In-House Counsel Conference in Philadelphia, Pennsylvania, many of my remarks focused on title review.

Typically there are two times when title will become a issue in the context of the Agreement of Sale:

• During the negotiation of the title provision; and
• During the review of title within the due diligence period

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On August 19, 2010, just over two months after identical bills were introduced in the NJ Assembly and Senate, Governor Chris Christie signed the Offshore Wind Economic Development Act into law. By creating offshore wind renewable energy credits and financial assistance to qualified projects, it is hoped that the new law will spur economic development and job growth in the state.

The new law establishes an offshore wind renewable energy certificate program that will require a percentage of electricity sold in NJ to come from offshore wind energy. The New Jersey Board of Public Utilities will be authorized to accept and approve applications for qualified offshore wind projects. The New Jersey Economic Development Authority will have the authority to provide financial assistance to qualified offshore wind projects and associated equipment manufacturers and assembly facilities in the state.

The new law represents another step in implementing the energy policy outlined by the governor on April 20, 2010, making renewable energy a key component of New Jersey’s strategy for economic recovery and growth.

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The New Jersey State Comptroller released a report Wednesday entitled “A Programmatic Examination of Municipal Tax Abatements.”  The Comptroller’s report is critical of both five year abatements and long term abatements granted by municipalities and was being widely reported in the press yesterday.

Referring to five year abatements (NJSA 40A-21-1 et seq.) and long term abatements (NJSA 40A-20-1 et seq.), the Comptroller’s report finds “numerous weaknesses in the regulation, implementation and oversight of these programs” including:

• PILOTs paid to municipalities are at the expense of counties, school districts and other taxpayers;
• There is lack of transparency and centralization of information about abatement agreements;
• Criteria and processes for evaluating potential abatement agreements are weak;
• Directly affected stakeholders are not adequately involved in the decision making process;
• Municipal follow up on abatement terms and benefits is lacking;
• Redevelopment areas in which abatements are granted are not periodically reviewed to account for neighborhood changes or improvement;
• Municipalities often fail to use abatements to bring in the type of redevelopment that would address community needs or bring appropriate improvement;
• The State does not closely monitor the use of abatements or offer significant guidance to municipalities on how to interpret relevant statutes or implement abatement programs.

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Despite potential substantive merit to Plaintiffs’ federal and state constitutional claims, the Federal District Court of the Northern District of New York in Rivendell Winery LLC v. Town of New Paltz dismissed Plaintiffs’ complaint for lack of subject matter jurisdiction on ripeness grounds as a result of the Plaintiffs’ failure to either obtain a final variance decision or to satisfy the relatively high burden for showing that an application for a variance from the Zoning Board of Appeals would have been futile. The crux of the decision lies in the Court’s reiteration of an important principle that although the success of a land use application may seem doubtful, doubt alone is insufficient to establish that the decision maker has dug in its heels and made certain that the application will be denied. As such, absent facts establishing that a final decision was obtained or that seeking a decision would be futile, constitutionally-based claims or challenges to other pre-decision actions taken by a governmental agency or its officers or employees may not be ripe for adjudication.

In this case, the Plaintiffs, Rivendell Winery, LLC and its principal owner, Susan L. Wine, had sought to reopen a winery and grape-growing business and had acquired two parcels of land in the Town of New Paltz, New York for this purpose. The property was located in the A-1.5 Zoning District which permits agricultural uses as of right. Although the term “agricultural” is not defined under the zoning definition section of the Town of New Paltz Town Code, it is defined elsewhere in zoning provisions as:

[a]ll agricultural operations and activities related to the growing or raising of crops, livestock, or livestock products, and agricultural products, as such terms are defined in or governed by the Agriculture and Markets Law of the State of New York on land qualified under Ulster County and NYS law for an agricultural exemption by the Assessor of the Town of New Paltz.

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You would never buy a used car without first having it thoroughly inspected. Purchasing a piece of real estate should not be any different. The due diligence provisions of an agreement of sale are like taking the used car to your mechanic, a way you can investigate a potential property prior to closing.

I recently gave a presentation called “Real Estate For In-House Counsel: An Examination of Title Issues, Contracts and Negotiations in Real Estate Deals” at the Association of Corporate Counsel (Delaware Valley Chapter)’s 2nd Annual In-House Counsel Conference in Philadelphia, Pennsylvania. My co-panelists were Michael Moyer of Land Services USA, Inc. and Aileen Schwartz of Hill International. The drafting and negotiation of due diligence language in an agreement of sale was one of the main focuses of our seminar.

There are three common areas in an agreement of sale where due diligence is addressed:

• Seller’s representations and warranties,
• Title review and
• Property investigation.

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