Real Property & Environmental Law Alert

Real Property & Environmental Law Alert

Transactional Real Estate, Development/Redevelopment & Environmental Law

Construction Underway on Jersey City Luxury Tower at 90 Columbus

Posted in Development/Redevelopment

Construction is underway on 90 Columbus, the final tower of Ironstate Development and Panepinto Properties Inc.’s multi-phase Columbus Drive development project in Jersey City, New Jersey. The project is designed to embrace modern urbanism and connect the city’s financial district and waterfront with the vibrant Grove Street historic area. The 50-story, 539-unit, luxury apartment tower at 90 Columbus is the fourth tower in the iconic development, following the already-completed residential buildings at 50 and 70 Columbus, the over 900-space parking garage, and the 152-room Marriott Residence Inn at 80 Columbus, which is currently under construction and expected to open this winter. Ground broke on 90 Columbus earlier in 2016, and completion is expected in October 2018.

A team of Gibbons attorneys led by Russell B. Bershad, co-chair of the Gibbons Real Property & Environmental Department, has represented the Ironstate and Panepinto joint venture on the Columbus project since its inception. Shortly after closing on a $170 million permanent financing on 70 Columbus, the Gibbons team completed the $155 million construction financing on 90 Columbus in June 2016. Gibbons also served as counsel in connection with the EB-5 equity investment component for 90 Columbus, supplied through the EB-5 immigration program, which allows issuance of visas to foreign investors in job-creating domestic projects. Gibbons structured the venture between the EB-5 equity investors and the 90 Columbus developer to ensure successful closing of the construction loan. The Gibbons team also completed a $16 million term loan monetizing the income stream derived from the sale of a $28 million Urban Transit Hub Tax Credit (UTHTC) grant awarded to the 70 Columbus project.

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Feds Must Consider All Reasonable Alternatives in Endangered Species Analysis

Posted in Development/Redevelopment, Environmental & Green Issues

Recently, the D.C. Circuit threw out the United States Fish & Wildlife Service’s (“FWS”) approval of a conservation plan to reduce the impacts of a proposed wind turbine farm on endangered Indiana bats. In Union Neighbors United Inc. v. Jewell, et al., Docket No. 15-5147, the Court of Appeals held that FWS failed to consider all reasonable alternatives to Buckeye Wind LLC’s (“Buckeye”) plan to limit bat injuries and deaths resulting from encounters with the proposed turbines as required by the National Environmental Policy Act (“NEPA”).

Buckeye is proposing to construct a 100 turbine, 250 megawatt wind energy facility in Champaign County, Ohio. The site of the proposed facility includes areas deemed to be suitable habitat for the federally-listed Indiana bat and is likely to affect bat populations in the area, including causing bat deaths due to the animals flying into moving wind turbine blades. As a result of these likely impacts, Buckeye was required to obtain an “incidental take” permit pursuant to the Endangered Species Act allowing Buckeye to kill a set number of bats annually.

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New York DEC Finalizes Definition of “Underutilized” Under Brownfield Cleanup Act Amendments

Posted in Development/Redevelopment

On July 29, 2016, the New York State Department of Environmental Conservation (“DEC”) announced that it had finalized the definition of “underutilized” for purposes of the 2015 Brownfield Cleanup Act Amendments and eligibility for redevelopment tax credits. The final rule closely tracks DEC’s March 9, 2016 proposed definition, which attracted numerous comments, mostly adverse, from members of the public and the regulated community.

Prior to the 2015 Amendments, any site in the Brownfield Cleanup Program automatically qualified for tangible property credits for expenses incurred in redeveloping the site. The Amendments restricted eligibility for development (but not cleanup) credits for sites in New York City to those meeting certain additional criteria. One of those criteria was being “underutilized.” The Legislature did not define “underutilized,” instructing DEC to promulgate a definition after consulting with New York City and the business community.

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New Jersey’s Time of Application Rule Does Not Bar a Favorable Zoning Amendment

Posted in Development/Redevelopment

In a published decision, the New Jersey Appellate Division ruled on July 27 that the “time of application” rule, which mandates that development applications are governed by the regulations in effect at the time of submission, and was intended to protect applicants from negative zone changes while their applications were pending, does not apply to zone changes which benefit a project.

The decision, Jai Sai Ram, LLC v. Planning/Zoning Board of the Borough of South Toms River, A-2075-14, involved an application by Wawa to construct a combined convenience store and gas station on property partially in a highway development zone and partially in a residential zone. Because the proposed use was not permitted in either zone, a “d(1)” use variance was required to allow a principal use not permitted in the zone. Over plaintiff’s objection, the Board granted the use variance, together with preliminary and final site plan approval and several bulk variances. The plaintiff appealed, and the trial court affirmed the Board’s decision.

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Newark Requires Developers to Identify Environmental Impacts of Projects

Posted in Development/Redevelopment, Environmental & Green Issues

Recently, the City of Newark (the “City”) approved Ordinance No. 16-0803, a/k/a the Environmental Justice and Cumulative Impacts Ordinance, (the “Ordinance”), which may significantly impact the process for seeking development approvals from the City.

The Ordinance purports to advance the policy of promoting environmental justice, environmental stewardship, and sustainable economic development in the City. More specifically, the Ordinance seeks to mitigate the disproportionate impact of pollution and environmental degradation on the health of minority and socioeconomically disadvantaged communities, otherwise known as “environmental injustice.” As the Ordinance notes, the prevalence of environmentally overburdened, underserved, and economically distressed communities near industrial centers and other areas afflicted by poor environmental quality is well documented.

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N.J. Appellate Division Holds that Municipalities are not Obligated to Satisfy “Separate and Discrete” Gap Period Need for Affordable Housing

Posted in Development/Redevelopment

On July 11, 2016, in an interlocutory appeal, the Appellate Division reversed Judge Mark A. Troncone’s February 18, 2016 order, which had found, as a matter of law, that municipalities were obligated to provide realistic opportunities for the construction of affordable housing for the need that accumulated during the period from 1999-2016 (the “gap period”). In an opinion by Judge Fasciale, the Appellate Division held that municipalities were not required to discretely calculate or satisfy the housing obligations that accumulated during the gap period as part of a municipality’s “prospective need.” In the Appellate Division’s view, those who are living in dilapidated, overcrowded, or cost-burdened housing would be adequately reflected in present need calculations, and any further alterations to municipal obligations would require legislative or executive action. The opinion highlights what appears to be a distinction between the constitutional fair share housing obligation, which had been understood to accrue year after year according the Court’s decision in Mt. Laurel II, and the compliance obligations arising under the Fair Housing Act, which are limited only to satisfying the statutorily prescribed need.

In its analysis, the Appellate Division specifically examines whether the Fair Housing Act or the core principles of the Mt. Laurel doctrine would permit a “separate and discrete” gap period obligation. Relying on the definition of “prospective need” set forth in the Fair Housing Act (N.J.S.A. 52:27D-304(j)) and the guidance of the Supreme Court’s opinion in In re the Adoption of N.J.A.C. 5:96 and 5:97 by the New Jersey Council on Affordable Housing, 221 N.J. 1 (2015), the court held that there was no authority for retroactively calculating the gap period distinctly. Further, the court also held that there was no foundation for any calculation of gap period need in any of the proposed Third Round regulations, dating back to COAH’s first attempts to promulgate conforming Third Round regulations in 2004. Prospective need, according to the Appellate Division, encompasses only the next ten years, not to any previously accrued need. In reaching this determination, the court relies in part on legislative silence, noting that in the twelve revisions to the Fair Housing Act between 1999 and 2016, the Legislature never addressed the satisfaction of gap period need.

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Plans for New Medical School Move Ahead as Hoffmann-La Roche Announces Completion of Purchase and Sale Agreement of its 116-Acre Campus

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

As reported in today’s NJBIZ, Hoffmann-La Roche has completed the purchase and sale agreement of its 116-acre campus, located in Nutley and Clifton, NJ, to PB Nutclif I, an affiliate of Prism Capital Partners. Seton Hall University and Hackensack Meridian Health then entered into a long-term lease with the developer for the creation of a private medical school and clinical research center. Seton Hall will also relocate its College of Nursing and School of Health and Medical Sciences to this site.

A team of Gibbons attorneys, led by Russell B. Bershad and Douglas J. Janacek, co-chairs of the Gibbons Real Property & Environmental Department, has represented Roche in the real estate and development aspects of this transaction and the preparation, negotiation, and completion of all transactional agreements. Closing is scheduled to be completed on September 30, 2016, and is contingent on obtaining development approvals for the School of Medicine.

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Legislature Approves Retroactive One-Year Extension of New Jersey’s Permit Extension Act in Superstorm Sandy-Impacted Counties

Posted in Development/Redevelopment

New Jersey’s Permit Extension Act (“PEA”) sunsetted at the end of 2015 when the Legislature did not enact a further extension. It has now been resurrected and extended retroactively, for one additional year, in nine counties most impacted by Superstorm Sandy.

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, and a subsequent amendment extended it until December 31, 2015.

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Gibbons Director Howard Geneslaw Installed as Chair 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 Chair of the Land Use Section of the New Jersey State Bar Association (NJSBA) during the section’s annual dinner at the New Jersey Law Center in New Brunswick on June 15.

Mr. Geneslaw has served on the Board of Directors of the Land Use Section of the NJSBA since 2009. He served as Secretary from 2014-2015 and Vice Chair from 2015-2016. The NJSBA’s Land Use Section serves as the statewide leader concerning issues involving or related to the field of land use law, including reviewing developments in land use law and attempting to reduce or eliminate costs and delays associated with the land use approval process.

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Retail Liquor License Renewals Now Due

Posted in Liquor Licensing

All New Jersey retail liquor licenses for the 2015-2016 license term expire on June 30, 2016. All New Jersey retail liquor licensees should have received notification in April through the Division of Alcoholic Beverage Control’s (ABC’s) web-based system, POSSE ABC, to renew their liquor licenses utilizing the ABC’s online portal. Subject to the specific renewal deadline fixed by each municipality, all state and municipal retail liquor license renewal fees for the 2016-2017 license term are currently due. Prior to renewal, all retail liquor licensees must also receive an Alcoholic Beverage Retail License Clearance Certificate for renewal from the Division of Taxation.

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