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

“From Ink to Occupancy, A Game Plan for a Successful Real Estate Project,” the latest installation of the Gibbons Women’s Initiative Seminar Series, was held earlier last week and attracted a great crowd, including real estate professionals and in-house counsel. Nancy A. Lottinville, Jennifer M. Porter and Ivette P. Alvarado guided attendees through the nuts and bolts of a commercial real estate contract, due diligence and the land use approvals process, with a focus on New Jersey and New York. A portion of the program was also dedicated to the current “Hot Topics” of real estate in New Jersey and New York, including FEMA’s Advisory Base Flood Elevations and cross-access easement issues. Thanks to various requests from attendees for more information, the RPE Law Alert will be posting blogs over the course of the next few weeks expanding on the topics covered during the program. Watch for the next installation: “Properly Identifying the Property in the Contract: Are You Sure You Know What You’re Getting?”

*Photo courtesy of Alphaspirit, Dreamstine.

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Late last month, New York State's Comptroller, Thomas P. DiNapoli, issued a report reviewing options for modifying the way the state incentivizes and administers cleanups of its thousands of remaining brownfield sites. The Report has special significance in light of Mr. DiNapoli's expertise in this area: he is a former Chair of the State Assembly's Environmental Conservation Committee and one of the architects of the state’s Brownfield Cleanup Act, passed in 2003.

The urgency of updating the Act is accelerating with every month. The Act’s tax credits--which, for many participants, are the most powerful incentives to enroll a site in the state’s Brownfield Cleanup Program (BCP)--expire as of December 31, 2015 for all sites which have not received their Certification Of Completion (COC) by that date. It generally takes two to three years from enrollment in the BCP to receipt of a COC. Accordingly, sites entering the BCP now are increasingly at risk of not obtaining their COCs prior to the sunsetting of these tax credits.

As Mr. DiNapoli acknowledges, his review builds on the recommendations of other commentators, including the New York State Bar Association Environmental Section's Brownfield Task Force. The options evaluated in the Report include:

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New York State was among the first to enact programs aimed at remediation and redevelopment of contaminated sites. The goal of such programs is both to promote economic revitalization and to encourage private entities to remediate the state’s contaminated sites. Three such programs, the Voluntary Cleanup Program (“VCP”), the Environmental Restoration Program (ERP), and the Brownfield Cleanup Program (“BCP”), have achieved considerable success, with over 400 sites having been remediated in the past two decades. Nevertheless, policy makers continue to search for ways to make these programs better and more cost efficient. Prompted by the impending expiration of key provisions of the BCP, a report released by the New York State Comptroller’s office in April 2013, provides an assessment of these programs, as well as some options for improvement going forward.

The VCP was New York’s first attempt to address its brownfields problem. It provided participants with limited liability protection, targeted cleanup standards based on the proposed use of the site, and overall a more streamlined process than the State Superfund process. Unlike the other two programs, it did not offer any financial incentives. Nonetheless, 212 sites have been remediated through this program. The ERP supports municipal projects to remediate and redevelop brownfields. Like the VCP, the ERP provides limited liability protection to participating municipalities. Unlike the VCP, however, the ERP provides for 90% of cleanup costs. Since its inception, this program has resulted in the remediation of 68 sites at an average cost to the State of approximately $780,000 per site. The BCP, like the VCP and ERP, offers limited liability protection and a streamlined process. Unlike those programs, however, the BCP offers refundable tax credits of 22% to 50% for cleanup costs and (subject to caps based on cleanup expenses and overall dollar amounts) 10% to 22% for redevelopment costs. Since its adoption, this program has seen the cleanup of 128 sites at an average tax credit cost to the State of $9.4 million per site.

In an effort to make such programs more cost-effective without discouraging the continued cleanup and redevelopment of New York’s brownfields, several options have been proposed. These include tweaking the incentives that are currently offered by, for example, limiting or removing tax incentives entirely, or maintaining credits for cleanup costs while restricting them for development costs. Other options include reducing the administrative burdens of these programs in order to simplify participation, or creating low-cost options for projects that are viable without financial incentives.

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In L & W Supply Corp. v. Desilva, 429 N.J. Super. 179 (App. Div. 2012), the Appellate Division of the New Jersey Superior Court concluded that, in certain circumstances, a construction lien claimant has an obligation to inquire into the source of funds paid for materials provided for construction projects or face the loss of the right to file a lien. The decision fills in some of the contours of the supplier’s duty set forth by the Supreme Court in Craft v. Stevenson Lumber Yard, Inc., which held that a supplier has a duty to allocate payments based on what he knows or should know about the source of the payments. The new decision has ramifications for suppliers and owners.

The Appellate Division held that when the purchaser of materials has not provided specific “reliable” instructions or when the circumstances are such that a reasonable supplier should suspect the purchaser has not used the owner’s funds to pay for materials supplied for that owner, then the supplier must “attempt to ascertain the source of the payment of funds so that it can allocate them to the correct accounts.” The court clarifies the lengths to which a supplier must go to ascertain the source of funds paid for materials by a subcontractor under the Construction Lien Law, N.J.S.A. 2A:44A-1, et seq. In other words, a supplier is not entirely free to allocate monies from a contractor who has multiple accounts with the supplier. If the supplier has a “reason to suspect” that the contractor’s allocation is “amiss”, then the supplier must make further inquiry and verify the source of the funds so that he may apply them correctly. Thus, passivity in the face of questionable circumstances may cause the supplier to forfeit its rights under the Construction Lien Law.

The L&W case arose in 2003 when, Meridian, as owner, entered in to a contract with Patock, as contractor, to build an assisted living facility. Detail, a subcontractor to Patock, contracted with L&W to supply materials for the project. L&W had sold materials to Detail’s principal, Joe DeSilva, for several of his business entities. One such entity was the subcontractor on the Meridian project, Detail. When Detail failed to pay L&W, L&W filed a construction lien.

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David J. Freeman, a Director in the Gibbons Real Property & Environmental Department, will speak at the upcoming Strafford webinar, "New Developments in Brownfield Redevelopment," on Tuesday, March 19, 2013.

Recently, brownfield development has grown more complex, creating new challenges on top of the pre-existing federal, state and local legal and regulatory requirements and permitting approvals. Mr. Freeman and his fellow panelists will discuss "hot topics" in brownfield redevelopment, including:

• Bona Fide Purchaser Requirements After the Ashley II Decision
• Vapor Intrusion
• Brightfields
• Changes in Land Use
• Financing
• Environmental Justice

There will also be a question-and-answer session on these and other brownfield-related topics following the speakers' presentations.

For additional information or to register at a 50% discount, please click here.

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As discussed in a recent blog post, two months ago, a New Jersey Appellate Division panel announced that commercial tenants were not liable for a dangerous condition outside of their leasehold. Now, in a surprising ruling, a separate Appellate Division panel has reached the opposite conclusion. While it is likely that the Supreme Court of New Jersey will be asked to resolve the divergent rulings, in the meantime, commercial tenants should be aware of their shifting duties to guests and customers.

In November 2012, the Appellate Division addressed an appeal from the Trial Court’s grant of summary judgment to a commercial tenant in a slip-and-fall case, where the injury occurred in the parking lot of a strip mall. In Kandrac v. Marazzo’s Market at Robbinsville the plaintiff filed suit against the owner/landlord of a strip mall as well as a commercial tenant in the strip mall (the grocery store at which she had been shopping) prior to her injury in the parking lot. The plaintiff alleged that both the owner of the strip mall and the commercial tenant were negligent in their maintenance of the parking lot. The Trial Court granted summary judgment in favor of the commercial tenant and the Appellate Division affirmed, concluding that the grocery store “owed no duty of care to its invitee for an injury that occurred in the common area of the shopping center.”

In Kandrac, the Appellate Division relied in large part on the lease agreement between the grocery store and the property owner, which clearly stated that the tenant was not responsible for the maintenance of “common areas,” including sidewalks and parking areas. The Appellate Division acknowledged that while the covenant in the lease pertaining to the landlord’s obligation to maintain common areas in good operating condition did not relieve the tenant of all duties to its customers regarding ingress and egress, the assignment of responsibility in the lease impacted the tenant’s ability to address conditions in the parking lot. The Court concluded that the lease “squarely assign[ed]” the duty of maintenance to the landlord, and thus an innocent victim had adequate recourse against the landlord.

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Well that didn’t take long. Last August, following a four year process, the City of Philadelphia’s comprehensive new zoning code became law. Because of the law’s broad scope and sweeping changes, it was agreed that the Code would be revisited one year after its enactment to determine its effectiveness and to consider making any necessary changes. Yet, on January 24, 2013, a mere 5 months later ,the Philadelphia City Council, overriding a veto by Mayor Michael Nutter, passed Bill No. 120889 by a vote of 13-3 and amended the new Code, significantly complicating pre-hearing interaction between neighbors and developers which the Code was intended to streamline. While Council has enacted some minor “clean-up” amendments to the Code since August, this amendment could have substantial consequences.

Many of the amendments impact developers who have filed an appeal to the Philadelphia Zoning Board of Adjustment. Among other things, these amendments (i) significantly increase the number of people to whom a developer must give notice of its appeal, (ii) require that the notices be mailed or hand delivered, and (iii) potentially increase the number of civic association meetings that developer must have before proceeding to the Zoning Board. Whereas the new Code sought to streamline this process, these amendments will likely serve to prolong it.

So now, in addition to providing notice to the local Registered Community Organization (RCO) where the property is situated (which is an existing requirement), developers (owner-occupied residential properties containing three or fewer units are exempt) filing an appeal to the Zoning Board must now also give written notice to:

• The Councilperson in whose district the property is located; and
• The owner, occupant, managing agent or other responsible person for:
  • every property on the same block as the subject property; and
  • every property on any blockface adjacent to the blockface of the subject property; and
  • every property on the blockface across the street from the subject property; and
  • every property on any blockface across the street from a blockface that is adjacent to the blockface of the subject property.

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The redevelopment of vacant and blighted parcels has been a cumbersome, frustrating and, in many cases unsuccessful, process for municipalities and developers alike. Pennsylvania’s new land bank legislation could change all that. Philadelphia, with its own land bank legislation is poised to take advantage of the state legislation.

In October 2012, Governor Tom Corbett signed into law House Bill No 1682, enabling legislation, which opens the door for municipalities throughout the Commonwealth of Pennsylvania to establish land banks. Land banks create a vehicle to return vacant, abandoned or tax delinquent properties back to productive use. Over 75 municipalities throughout the United States have turned to land banks as means to battle blight, rebuild neighborhoods and spur economic growth.

Frequently, multiple agencies within a city, borough or township hold title to vacant, abandoned or tax delinquent properties, complicating procedures to deal with those parcels. In sharp contrast, a land bank serves as the central repository for such government-owned properties within its boundaries so as to better position them for redevelopment.

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Howard D. Geneslaw, a Director in the Gibbons Real Property & Environmental Department, will speak at the upcoming NJ Chapter of the American Planning Association's 2013 New Jersey Planning Conference on, "The Use Variance: Whether, When and How?" The panel will cover New Jersey's unique, ever changing concept of a policy variance.

Mr. Geneslaw, among other panelists, will discuss:

• The differences between commercial and residential applications;
• Regional differences in commercial and residential practices;
• How to develop the skill to advise your clients on choosing a path between use variances and rezonings;
• The advantages and disadvantages of bifurcation;
• How to arm yourself for the discussion about "usurpation;" and
• Being prepared to address the policy requirements to support a successful application.

For more information or to register, please click here.

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This article is the third in a series that deals with the legal implications of Superstorm Sandy, which devastated many areas of New Jersey on October 29, 2012. The resulting widespread power outages crippled many businesses which serve the public by providing essential services. To prevent that situation from recurring, a number of bills have been introduced in the New Jersey legislature which would require a variety of private businesses and facilities to install standby generators.

The most comprehensive of the bills, called the New Jersey Residents’ Power Protection Act and designated as A-3495, requires that "facilities and businesses...which provide critical and unique services that are vital to public safety and economic recovery during times of widespread power loss due to a natural disaster or other catastrophic event...have secondary sources of power.” These entities include newly constructed grocery stores (including supermarkets and convenience marts); gas stations; nursing homes, assisted living facilities, and subacute rehabilitation facilities; first aid, ambulance, and rescue squads; pharmacies; firehouses; and boarding houses. To offset the cost of implementation, the bill establishes a corporation business tax deduction and gross income tax deduction (maximum of $10,000), and a sales tax exemption, for the purchase of equipment.

A similar bill, designated as A-3064, would require installation and use of generators by specified eligible businesses, defined to encompass retail motor fuel dealers, motor fuel wholesalers, motor fuel terminal facilities, motor fuel refineries, nursing homes, assisted living facilities, subacute rehabilitation facilities, and newly constructed grocery stores. The New Jersey Economic Development Authority would be required to offer low-interest loans to these businesses to facilitate acquisition and installation of generators.

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The Third Circuit has just issued a non-precedential ruling under New Jersey law reminding us how naked a naked lease guarantor can be, and how careful we have to be when reviewing "form" lease guaranties. In G&S Livingston Realty, Inc. vs. CVS Pharmacy, Inc., CVS was the guarantor of a lease in which the retail tenant had gone into bankruptcy and rejected the lease. Of course, absent other information, CVS would stand behind the obligations of the bankrupt retail tenant. In this instance, the retail tenant had options and rights under the lease which CVS as an ordinary guarantor was not able to take advantage of.

In this case, under the lease the tenant had rights in the event the landlord failed to meet a co-tenancy obligation (i.e. an obligation to keep certain other specified tenants in occupancy). The tenant had both the right to pay alternative minimum rent based on its actual sales if Landlord did not meet a co-tenancy obligation for a certain period of time and, if the failure to meet the co-tenancy obligation continued for a longer specified period of time, to terminate the lease.

It was undisputed that the landlord did not satisfy the co-tenancy requirement. CVS argued it should only have to pay the alternative minimum rent after the landlord failed to meet the co-tenancy obligation, and to terminate the lease and accordingly pay no rent after the landlord's failure to meet the co-tenancy requirement continued for the period of time entitling tenant to terminate. The Court ruled that the guarantor, because it is neither a party to the contract nor a third party beneficiary thereof, is not entitled to the benefit of either of these protections. So even though the landlord had failed to maintain the required co-tenancy and the tenant (without any regard to the tenant's ability to pay) would have first paid reduced rent and then (if it terminated) no rent, the guarantor must pay full rent for the entire lease term.

The lesson is clear - if the guarantor is to have the benefit of these tenant protections that benefit has to be expressly documented.

Shepard A. Federgreen is a Director in the Gibbons Real Property & Environmental Department.

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The Gibbons Real Property & Environmental Department will once again exhibit at the New York International Council of Shopping Centers (ICSC) National Conference & Deal Making event today and tomorrow. The Conference provides an opportunity for real estate professionals to network and focus on getting deals done.

Please stop by and visit us at Booth #489 in Americas Hall II at the Hilton New York to meet several attorneys from the firm's Real Estate Development and Transactional Real Estate groups. While you're there, test your putting skills and see how you can "ace" your next deal!

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David J. Freeman, a Director in the Real Property & Environmental Department of Gibbons P.C., has been unanimously reelected to a second term as president of the New York City Brownfield Partnership, a public/private nonprofit organization dedicated to promoting the cleanup and redevelopment of brownfields in New York City.

The Partnership is a member organization of more than 40 real estate developers and owners, community organizations, governmental agencies, and environmental professionals who are active on brownfield matters. Working with the New York City Office of Environmental Remediation (OER), the Partnership serves as an information resource on a range of brownfield development issues; encourages collaboration among stakeholders in the brownfields process; helps communities understand their brownfield issues; highlights successful projects through an annual awards program; supports the education and training of brownfield professionals; and provides information and insight to help the city’s development community better navigate the process of redeveloping vacant and underutilized land with environmental issues.

“David joined Gibbons earlier this year as part of a strategic expansion of our environmental practice throughout the region,” says Patrick C. Dunican Jr., Chairman and Managing Director of the firm. “His work with the Brownfields Partnership raises the profile of our practice in New York City and strengthens our ties with critical contacts and organizations in the field.”

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Commercial tenants in multi-tenant shopping centers can now breathe a sigh of relief as the New Jersey Appellate Division in Kandrac v. Marrazzo's Market of Robbinsville, safeguards the boundaries of commercial tenant liability for business invitees, reiterating that a commercial tenant does not owe a duty to its patrons to maintain a common area, such as a parking lot, that the landlord is contractually obligated to maintain.

The decision adds to the previously designated responsibilities of commercial entities, see, e.g., Luchejko v. City of Hoboken (commercial entities have considerable rights to maintain adjacent sidewalks); Stewart v. 104 Wallace St., Inc. (commercial landowners have a duty to maintain sidewalks abutting property in reasonable good condition); Antenucci v. Mr. Nick’s Mens Sportswear (extending duty of commercial tenants to maintain sidewalk abutting store in exclusive possession of tenant); Warrington v. Bird (proprietor has duty to exercise reasonable care to not subject patrons to unreasonable risk of harm in traversing expected route), while confirming a special carve-out for commercial tenants in a multi-tenant shopping center who have contracted out of certain maintenance duties in common areas.

The injured plaintiff in Kandrac v. Marrazzo’s Market at Robbinsville, was walking through a parking lot of a multi-tenant shopping center after leaving Marrazzo’s Market when her “foot caught a hump” in the pavement, causing her to trip, fall forward on her face, and sustain injuries. She thereafter filed a complaint against Marrazzo’s Market (the “tenant or Marrazzo’s”) and Foxmoor Associates, LLC (the “landlord”) alleging negligence. The tenant filed a motion for summary judgment based on a provision of its lease agreement, which stated, in relevant part, that “the LESSOR [(Foxmoor)] covenants and agrees that it shall maintain the common areas of the shopping center in good operating condition.” Finding the landlord responsible for maintenance of the common area where plaintiff was injured, the Trial Court granted the tenant’s motion.

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This article is the second in a series that deals with the legal implications of Superstorm Sandy, which devastated many areas of New Jersey on October 29, 2012. Owners of property with a structure that has suffered substantial damage or that has been destroyed should be aware that they may qualify for a lower property tax assessment, which may result in lower property taxes next year.

New Jersey’s taxation statute, N.J.S.A. 54:4-35.1, states that: 

When any parcel of real property contains any building or other structure which has been destroyed, consumed by fire, demolished, or altered in such a way that its value has materially depreciated, either intentionally or by the action of storm, fire, cyclone, tornado, or earthquake, or other casualty, which depreciation of value occurred after October first in any year and before January first of the following year, the assessor shall, upon notice thereof being given to him by the property owner prior to January tenth of said year, and after examination and inquiry, determine the value of such parcel of real property as of said January first, and assess the same according to such value.  

Thus, property owners impacted by Superstorm Sandy must provide notice to their local tax assessors by January 10, 2013, in order to potentially lower their equalized assessed value for 2013. Although a lower assessed value may not translate into a lower tax burden, especially in municipalities where many properties were severely damaged by the storm, it at least potentially gives property owners an opportunity to lessen their financial burdens during the rebuilding process. Of course, property owners should consult their own tax advisors for advice.

This blog contains general information, not tax advice. For questions relating to your property tax assessment, contact your tax advisor.

IRS Circular 230 Disclaimer: To ensure compliance with IRS Circular 230, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein. For more information visit www.gibbonslaw.com/circular230.

Jennifer P. Smith is an Associate in the Gibbons Real Property & Environmental Department.

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On October 23, 2012, the New York Court of Appeals handed down its decision in Bronx Committee for Toxic Free Schools v. New York City School Construction Authority. In it, the Court held that the public notice procedures that the School Construction Authority followed under the New York State Brownfield Cleanup Act (BCA) did not satisfy the related, but distinct public notice and comment obligations under the State Environmental Quality Review Act (SEQRA).

The issue arose in Bronx Committee because at the time of SEQRA review, remediation had not yet taken place. Accordingly the Authority did not include in its Environmental Impact Statement (EIS) a plan for long-term maintenance and monitoring, believing that any discussion of such procedures would be premature prior to completion of cleanup. When remediation was finished, the Authority took the position that a Supplemental Environmental Impact Statement (SEIS) was unnecessary in light of the extensive public notice requirements that it had followed pursuant to the BCA.

The Court disagreed with the Authority. Because “the long term maintenance and monitoring of … engineering controls were too important not to be described in an EIS,” the Court held that the plain language of SEQRA required their inclusion, either in the EIS or by the filing of an SEIS.

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On November 3, 2012, less than five days after Hurricane Sandy washed away much of the Jersey Shore and its infrastructure, NJDEP Commissioner Bob Martin signed Administrative Order No. 2012-13 (the “Order”), temporarily waiving permitting requirements for State, County and Municipal agencies seeking to rebuild after the storm. The swift action of NJDEP unleashed a storm of its own from critical environmentalists worried that the rush to rebuild the devastated areas would recreate the same vulnerabilities.

The Order provides certain temporary permitting waivers to State, County and Municipal agencies for purposes of repairing and/or replacing public infrastructure damaged as a result of Hurricane Sandy. Permitting programs and rules affected by the Order include the Coastal Permit Program, the Flood Hazard Area Control Act, and the Freshwater Wetlands Protection Act Rules.

Waivers provided by the Order are limited to activities consisting of (1) in-kind replacement of existing public infrastructure, and (2) repair of scouring caused by Hurricane Sandy that is directly adjacent to an existing bridge, culvert, or public roadway. In order to qualify, the activities cannot (a) result in an exceedance of the pre-existing footprint of the public infrastructure, (b) adversely impact previous flow conditions or environmental resources, or (c) obstruct flow in the respective channel or floodway.

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On October 29, 2012, Superstorm Sandy devastated many areas of New Jersey, with the coastal areas seeing unprecedented devastation. Residents and business owners from the Jersey Shore, including the bayshore areas, face the daunting task of rebuilding. Many business and property owners, however, cannot simply apply for a building permit to replace damaged structures. For many, it will be an uphill legal battle to rebuild. This is particularly true for property owners who had been operating nonconforming uses.

Many businesses and residences in the shore area were constructed many years ago, before local zoning codes were adopted or subsequently amended. When municipalities subsequently adopted or amended their zoning ordinances, some existing uses were rendered prohibited. Those existing, but subsequently prohibited uses, are known as nonconforming uses.

The Municipal Land Use Law (“MLUL”) defines a nonconforming use as “a use or activity which was lawful prior to the adoption, revision, or amendment of a zoning ordinance, but which fails to conform to the requirements of the zoning district in which it is located by reason of such adoption, revision or amendment.” N.J.S.A. 40:55D-5. When a person lawfully uses the land, buildings, or premises, and applicable zoning regulations are subsequently amended, he or she “acquire[s] a vested right to continue in such form, irrespective of the restrictive zoning provision.” Belleville v. Parrillo’s, Inc., 83 N.J. 309, 315 (1980).

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On November 14, 2012, the New Jersey Supreme Court will be hearing oral argument as to whether the latest regulations adopted by the Council on Affordable Housing (“COAH”) are valid. Regardless of how the Supreme Court rules, the decision will have a far-ranging impact on the future of affordable housing in New Jersey and is being watched closely by developers, municipalities and public interest groups.

COAH’s regulations governing affordable housing, enacted pursuant to the Fair Housing Act, N.J.S.A. 52:27D-301 to -329.19, have had a tortured history. The so-called “first-round” regulations were effective from approximately 1987 to 1993. The “second-round” regulations followed thereafter. COAH initially adopted its “third-round” regulations in 2004. The “third-round” regulations were largely invalidated by the Appellate Division in In re Adoption of N.J.A.C. 5:94 and 5:95, 390 N.J. Super. 1, 73-74 (App. Div. 2007) [Third Round I].

COAH readopted revised “third-round” regulations in 2008. Those regulations were challenged by at least twenty-two municipalities and various trade organizations and public interest groups, and again were largely invalidated by the Appellate Division in In re Adoption of N.J.A.C. 5:96 and 5:97, 416 N.J. Super. 462, 488 (App. Div. 2010)[Third Round II]. The Appellate Division specifically overturned COAH’s use of a growth share methodology for calculating municipalities’ obligations to provide affordable housing and ordered that COAH adopt new regulations within five months using the methodology employed in the “first-round” and “second-round” regulations. COAH has not adopted new regulations. The New Jersey Supreme Court granted certification in the Third Round II case, 205 N.J. 317, on March 31, 2011, and will now hear oral argument on November 14, 2012. Oral argument was originally scheduled for November 7, but rescheduled because of the storm.

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A New Jersey Appellate Court ruled against several landowners in Long Branch who sought compensation for losses they allegedly suffered during the pendency of a condemnation action that the city eventually abandoned. In the absence of an actual “declaration of taking,” the Court held in its October 16 opinion, the landowners were not entitled to compensation.

The case arose from condemnation actions that Long Branch commenced in 2005 and 2006 to implement a redevelopment plan for an area that it had found to be “in need of redevelopment.” The trial court rejected motions to dismiss filed by the defendants in those actions, granted judgments in favor of the City, and appointed condemnation commissioners.

The trial court’s decision, however, predated the Supreme Court’s landmark opinion in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, which held that the New Jersey Constitution requires a finding of actual blight before private property may be taken for purposes of redevelopment. The Appellate Division reversed the judgment and remanded the case to the Law Division to give the City a chance to show that it could meet the Gallenthin standard. Instead, the City entered into settlement negotiations and, in 2009, abandoned the eminent domain proceedings.

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The Gibbons Real Property & Environmental Department will once again exhibit at the International Council of Shopping Centers (ICSC) National Conference & Deal Making Idea Exchange, this year located at the Atlantic City Convention Center in Atlantic City, NJ on September 11 & 12. The Conference provides an opportunity for real estate professionals to network and focus on getting deals done.

Please stop by and visit us at booth #231 to meet several attorneys from the firm's Real Estate Development and Transactional Real Estate practice groups. While you're there, test your putting skills and see how you can "ace" your next deal.

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On August 6, New Jersey Board of Public Utilities (BPU) announced proposed amendments to multiple sections of the regulations governing renewable energy and energy efficiency. The amendments will affect New Jersey’s renewable portfolio standards, class II renewable energy certifications (RECs) and net metering. These proposed amendments come a few weeks after Governor Christie signed S-1925 into law on July 24, 2012, increasing the state’s solar requirements, and giving what is expected to be a boost to the solar energy business in the state.

Among the amendments is a provision which will specify the eligibility criteria for electric generation to be used as the basis for class II RECs. It is intended to codify existing practice and clarify what electric generation qualifies for class II RECs.

The changes proposed to the net metering regulations would clarify the terminology for the time period used to size renewable generation facilities. In addition there is a proposed expansion of the net metering to generation facilities located on contiguous properties.

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On July 11, the New York State Department of Environmental Conservation (NYSDEC) released the draft scope for the Generic Environmental Impact Statement (GEIS) on proposed amendments to the regulations that implement the State Environmental Quality Review Act (SEQRA). These amendments, intended to streamline the SEQRA process, would create a number of significant changes to the regulations, the first changes since 1996.

Among the proposed changes are to require public scoping of all Environmental Impact Statements (EIS). Currently this is not mandatory. Making the process mandatory recognizes the importance of public scoping as a tool to focus an EIS on key substantive and significant issues. In addition, there would be an automatic completion provision to the final EIS review process under certain circumstances. If the final EIS is not prepared within the 180-day period for completion, the EIS will be deemed complete on the basis of the draft EIS, public comment and the response to comments prepared and submitted by the project sponsor to the lead agency. This provision extends review periods and provides certainty for when the EIS process ends.

In addition, a lengthy expansion of the list of Type II actions (actions not subject to SEQRA) is proposed which includes:

• minor subdivisions;
• recommendations of a county or regional planning entity following a referral pursuant to General Municipal Law sections 239-m or 239-n;
• a number of actions that encourage development in urban areas verses development in greenfields;
• actions encouraging the installation of solar energy arrays;
• and actions that allow for the sale, lease or transfer of property for a Type II action.

The proposed amendments also show NYSDEC’s embrace of the electronic age by allowing for electronic filing of EIS’s with NYSDEC and attempt to rectify problems associated with project sponsor uncertainty regarding the costs of SEQRA review by the lead agency and its consultants, by requiring that a lead agency provide a project sponsor with an estimate of the review cost by the lead agency and/or its consultants, if requested.

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David J. Freeman, formerly head of the Environmental Practice Group at the New York City office of Paul Hastings, has joined Gibbons P.C.’s New York office as a Director in the Real Property & Environmental Department. Mr. Freeman represents the buyers, sellers, and developers of properties in all environmental law areas including brownfields, due diligence, hazardous waste cleanups, and sustainability. He also litigates matters related to remediation, cost recovery, property damage, and exposure to toxic substances.

“David is a highly regarded lawyer who will help us expand the environmental practice in our New York office,” says Patrick C. Dunican Jr., Chairman and Managing Director of Gibbons. “He will help us to provide additional services to our clients in this market.”

Mr. Freeman has been recognized by clients and peers as a leading environmental lawyer in both the Chambers USA Guide to America’s Leading Law Firms and Super Lawyers. He is also a frequent author and speaker on environmental law topics, and received a 2012 Burton Award for Legal Achievement for his work as “an outstanding law firm author.”

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The Gibbons Real Property & Environmental Department, and four of its attorneys, were among the 10 Gibbons practice areas and 20 individual attorneys ranked in the 2012 edition of the Chambers USA Guide to America’s Leading Lawyers for Business. 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.

The Chambers editorial and client testimonials included below highlight the Gibbons Real Property & Environmental Department and its attorneys:

Real Estate: The firm fields a skilled team in transactional real estate and development work, and has an enviable roster of clients. The team’s recent highlights include handling the real estate work in ITT’s separation into three separate companies, and the representation of Cooper University Hospital in its purchase of land for a new cancer facility. Clients particularly appreciate the hands on and personal approach that the partners at this large firm offer. Sources say: “I will use this firm going forward as often as possible and certainly for all my future real estate work. They are superior with respect to service, resources, thoroughness and professionalism.” “They are very well respected with a reputation for results. Where necessary, they will work day and night to meet deadlines.”

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Howard D. Geneslaw, Esq., a Director in the Gibbons Real Estate Development practice group, will speak at the New Jersey Institute for Continuing Legal Education’s (NJICLE) annual program “Land Use Basics” on June 13, 2012. Mr. Geneslaw’s topic will be redevelopment law.

The all-day program is designed to provide practitioners with a roadmap for navigating the land use maze. All of the speakers serve on the Board of Directors of the Land Use Section of the New Jersey State Bar Association. 

The program will cover the following additional topics:

• Fundamentals: Municipal Land Use Law & Regulation
• Variances
• Strategy: Assessing the Entitlement Process
• Obtaining the Approval: Application, Notice and Hearing Process
• The Post-Approval Process: Resolution Compliance
• Effect of Approvals & Vested Rights
• Litigating the Action in Lieu of Prerogative Writs
• Ethical Considerations
• Affordable Housing Obligations

The program will be held at the Wilshire Grand in West Orange, New Jersey, and is approved for continuing legal education (CLE) credits in New Jersey, New York and Pennsylvania.

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The revised Philadelphia Zoning Code will be effective before your Labor Day barbeque is over, and there is a smorgasbord of changes to digest. For instance, let’s take “notice,” a contentious issue the new Code seeks to resolve with procedural safeguards and requirements.

A frequent area of conflict under the current (soon to be former) Code centered on interactions between developers and neighbors during the zoning/use approval process. Many times, a developer would complain that it did not know which neighborhood civic association represented a particular area, or that a civic association’s meeting schedule resulted in delays in the zoning hearing and approval process. Conversely, neighbors would charge that they were not given adequate notice of applications filed or permits issued with enough lead time to have meaningful input into the process. The revised Code seeks to balance the property owner/developer’s interest in certainty, both in terms of time required to complete the application process and identification of potentially interested parties, against the neighbors’ need for notice of the application and an opportunity to participate.

Under the revised Code, a civic association which desires to receive notices of applications and hearings will have to register annually with the City of Philadelphia Planning Commission as a Registered Community Organization, or RCO. In that registration, the RCO must, among other things, identify a contact person, specify its geographic boundaries, and advise whether it wants to be provided with notices by mail or electronically. An RCO can either be a Local Registered Community Organization, which has a geographic concern relating to a certain neighborhood, or an Issue-based Registered Community Organization, which can claim a much larger geographic area of concern, even up to entirety of the city.

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In a recent decision of the Superior Court of Connecticut, Fairfield Judicial District, captioned Urban Girls, Inc. v. Zoning Board of Appeals of Bridgeport, the Court was confronted with an interesting set of issues involving the intersection of the alleged lapse of a nonconforming use and the resulting loss of the right to utilize a liquor permit. The Court found that the Zoning Board of Appeals applied the incorrect standard by following the Bridgeport zoning regulations, which had not been amended to reflect amendments to the State’s zoning laws. Thus, the matter was remanded to the Zoning Board of Appeals to make a determination on whether there was an intent to abandon the nonconforming use, which would be determinative on the status of the liquor permit.

The case arose when the zoning enforcement officer refused to issue a certificate of noncompliance on the basis that the prior use, which involved a café, service of liquor, and adult entertainment, had been closed for much of the preceding 18 months. The certificate was important because a zoning signoff, either that the use was permitted under applicable zoning or was a legal nonconforming use, was needed in order to obtain an on-premises liquor permit. The denial was appealed to the Zoning Board of Appeals, which affirmed, on the basis that the record contained substantial credible evidence of non-use for more than the sixty-day period specified in the zoning regulations. Matters were further complicated by a radius restriction in the zoning regulations which prohibited a business utilizing a liquor permit from being located within 1,500 feet of another such business. There was another such business within the specified distance, so if the property’s nonconforming status had lapsed, the right to a liquor permit would have lapsed along with it and a variance would be required.

In their appeal, plaintiffs alleged that a bar or café with service of alcoholic beverages was legally ongoing for approximately 30 years, and that two prior variances had been granted by the Zoning Board of Appeals. As such, they asserted that operation of a café with liquor service constituted a legal nonconforming use. The dispute centered on Section 12-10(d) of the zoning regulations, which provides for termination of the right to serve liquor after sixty consecutive days of non-use if within 1,500 feet of another licensed premises. The Court reviewed the evolution of the law of nonconforming uses in Connecticut, including the decision of the Connecticut Supreme Court in Essex Leasing, Inc. v. Zoning Board of Appeals, 206 Conn. 595 (1988), which held that municipalities could provide for the termination of nonconforming uses through the passage of time, and the subsequent enactment of Public Act 89-277 in 1989, codified in Connecticut General Statutes Section 8-2, which provided that zoning regulations cannot provide for the termination of nonconforming uses solely as a result of non-use for a specified period of time.

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In its recent decision in the Matter of Kempisty v. Town of Geddes, the Appellate Division, Fourth Department, provides an important reminder to approving authorities that conditions attached to the approval of site plans must have some legitimate relationship or “nexus” to the project’s impacts or they will be stricken. Although the case breaks no new ground, it does effectively outline the considerations that should be applied when determining whether to impose conditions of approval.

The case involved two contiguous properties in the Town of Geddes. One was improved with various automotive businesses, while the other was vacant. The applicant purchased the vacant parcel to expand the automotive businesses on the developed parcel. Both properties were zoned to permit the auto-related uses in question as-of-right, subject to site plan review. Since the developed parcel was engaged in auto-related uses prior to the adoption of the current zoning regulations, those uses were legal nonconforming as to the site plan approval requirement. Therefore, the applicant filed its site plan application to encompass only the vacant parcel, although the existing auto-related uses were to be expanded and reconfigured. Under the zoning regulations, the Town Board retained site plan review authority, and the Planning Board acted in an advisory capacity.

Upon its review, the Planning Board requested that the site plan application be revised to include both parcels, and the applicant complied under protest. Ultimately, the Planning Board recommended to the Town Board that the site plan be approved, subject to four conditions. The Town Board accepted that recommendation, but imposed an additional 11 conditions, most of which were requirements from the zoning code which pertained to motor vehicle service, repair and sales facilities when such uses required a special permit, as they did in all other zoning districts in the town which allowed them at all, except this one, where they were permitted as-of-right. The applicant filed an Article 78 proceeding to annul certain of the conditions imposed by the Town Board.

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Ready or not, the revised Philadelphia Zoning Code becomes effective on August 22, 2012. This massive and comprehensive overhaul of the Zoning Code, its first since 1962, required over four years to complete. It was coordinated by the thirty-one member Philadelphia Zoning Code Commission, and is the culmination of countless hours of work by the ZCC, including scores of regular meetings, informational meetings, community meetings, meetings with stakeholder groups and public hearings. The changes from the current Code are many and significant, with important modifications to base and overlay zoning districts, use categories, area and bulk requirements, floor area ratio calculations, parking standards and, perhaps most meaningful, the administrative process. We will be examining these and other major revisions in this blog on a regular basis, both as the Code’s implementation date approaches as well as after it is in effect.

Alfred R. Fuscaldo is a Director in the Gibbons Real Property & Environmental Department.

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Twelve lawyers in the Gibbons Real Property & Environmental Department were listed by New Jersey Super Lawyers and New Jersey Super Lawyers Rising Stars as leaders in their fields. In addition, Russell B. Bershad, Co-Chair of the Gibbons Real Property & Environmental Department, was listed as a top 100 attorney in New Jersey. Overall, 69 lawyers in the firm were featured in these two publications.

The following members of the department were listed in the 2012 issue of Super Lawyers: 

• Russell B. Bershad, Real Estate, Co-Chair of the Gibbons Real Property & Environmental Department
• Irvin M. Freilich, Environmental Litigation
• Howard Geneslaw, Land Use/Zoning
• Douglas J. Janacek, Land Use/Zoning, Co-Chair of the Gibbons Real Property & Environmental Department
• John H. Klock, Construction/Surety
• Susanne Peticolas, Environmental

Those listed in the Rising Stars section were:

• Michael Miceli, Land Use/Zoning
• Sandro G. Ocasio, Environmental Litigation
• Uzoamaka N. Okoye, Business Litigation
• Jennifer M. Porter, Land Use/Zoning
• Jennifer P. Smith, Real Estate
• Jason R. Tuvel, Land Use/Zoning

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About two months ago, several NJ Legislators, including State Senator Paul Sarlo (Bergen/Passaic) and Assemblyman Ronald Dancer, proposed bills that would amend the 2008 “Permit Extension Act.” Designed to give developers breathing room in the sluggish economy by extending the validity of development approvals, Proposed Bill S743 (the “Bill” or “S743”) is gaining traction and is moving through the necessary legislative committees. On March 5, 2012, S743 passed by a vote of 4-0 by the Senate Budget and Appropriations Committee. The Bill is scheduled to go before the Assembly Appropriations Committee on March 12, 2012.

Under the current version of the Permit Extension Act, the expiration of all “approvals” that were granted during the “extension period” as defined in the statute have been tolled through December 31, 2012. The “extension period” is currently defined as “the period beginning January 1, 2007 and continuing through December 31, 2012.” S743 proposes that the definition of the “extension period” be changed so that it runs through December 31, 2014. Therefore, based on the 6-month tolling provision currently in the Permit Extension Act, approvals received during the extension period could be extended as far out as June 30, 2015. It should be noted that A337 proposed to extend the “extension period” through December 31, 2015. However, A337 has not gained the same head of steam as S743.

S743 as amended includes language to make it clear that as it pertains to Statewide planning areas, the definition of “extension area” shall remain in effect until June 30, 2013, or until such later time as the State Planning Commission revises and readopts New Jersey’s State Strategic Plan and adopts regulations to refine this definition. Further, all underlying municipal, county, and State permits or approvals within the Pinelands Area are extended pursuant to the “Pinelands Protection Act,” N.J.S.A. 13:18A-1 et seq.

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Apparently concerned that the economy may not be recovering rapidly enough, the 215th New Jersey Legislature now convened, introduced a new bill (A337) on January 10, 2012, by Assemblyman Ronald S. Dancer of District 12, to change the definition of the “extension period” under the Permit Extension Act so that it runs through December 31, 2015. Therefore, based on the 6-month tolling provision currently in the Permit Extension Act, approvals received for development applications during the extension period could be extended as far out as June 30, 2016. Bill A337 has been referred to the Assembly Housing and Local Government Committee.

In 2008, as the economy was sliding into recession, the New Jersey Legislature passed the “Permit Extension Act,” which tolled the expiration of all development approvals that were granted during the “extension period” as defined in the statute. The intent was to preserve the benefit of permits until the economy improved. The “extension period” is currently defined as “the period beginning January 1, 2007 and continuing through December 31, 2012.” The definition of “approvals” under the Permit Extension Act covers most permits issued by State rule or regulation, including, preliminary and final approvals for development applications under the New Jersey Municipal Land Use Law.

If signed into law, Bill A337 could provide developers with an opportunity to wait a little longer for the economy to turn around in order to build projects that have received approvals and are considered dormant at the present time.

Jason R. Tuvel is an Associate in the Gibbons Real Property & Environmental Department.

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The Gibbons Real Property & Environmental Department will once again exhibit at the International Council of Shopping Centers (ICSC) National Conference & Deal Making Idea Exchange at the Hilton New York on December 5-6.

The Department's booth will be in the same location as prior years, #490 in Americas Hall II. Stop by and meet with some of the Department's seven attorneys who will be attending. Show hours are Monday, December 5, from 9:00 am to 5:30 pm, and Tuesday, December 6, from 8:30 am to 4:00 pm.

We look forward to seeing you there!

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Gibbons P.C. is proud to announce that several Real Property & Environmental Department (RPE) practice areas have achieved national and metropolitan rankings in the 2012 edition of Best Law Firms, published by U.S. News and Best Lawyers®. Best Lawyers® is the oldest and most respected peer-review publication in the legal profession. In addition, seven RPE attorneys have been individually selected for inclusion in six different categories.

The firm’s Land Use & Zoning Law practice was nationally ranked in the third tier in its category. In addition, the Department achieved first-tier rankings for the Newark, New Jersey metropolitan region in five categories:

• Environmental Law
• Land Use & Zoning Law
• Litigation – Environmental
• Natural Resources Law
• Real Estate Law

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Gibbons is pleased to announce that Nicole E. Taplin, Esq. has joined the firm as an Associate in the Gibbons Real Property & Environmental Department. Nicole concentrates her practice on commercial real estate transactions including acquisitions, dispositions, financings and leasing matters.

Nicole received her J.D. from the University of Miami School of Law and her B.A., in economics and philosophy, from Emory University. Admitted to practice in the States of New Jersey and Florida, she represents clients in various aspects of commercial real estate, including the negotiation, documentation and closing of the sale, purchase and development of vacant land, office buildings, apartment buildings and complex mixed-use projects. She also has significant experience representing owners and developers in the structuring, creation and operation of residential, commercial, mixed-use and hotel condominiums, homeowners’ associations and planned communities.

Prior to joining Gibbons, Nicole worked at Greenberg Traurig, LLP in the Real Estate Department of their Miami office for several years and later operated her own law firm focusing on real estate transactions.

“Beyond exceptional legal skills, Nicole comes to us with several years experience running her own law firm, which we believe will greatly inform her legal practice. Like our clients, she has been a hands-on business owner and operator which will provide highly relevant insight and perspective as she addresses the varied real estate needs of our clients,” states Russell B. Bershad, Co-Chair of the Gibbons Real Property & Environmental Department.

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The International Council of Shopping Centers (ICSC) annual PA/NJ/DE Idea Exchange is coming up soon. Although the show usually is held in mid-September, this year it has been pushed back to October 12-13. As in the past, the show will be held at the Pennsylvania Convention Center and will provide an opportunity for real estate professionals to network and focus on getting deals done.

Gibbons P.C. will once again exhibit at the show. We expect to have at least six attorneys from the firm’s Real Estate Development and Transactional Real Estate practice groups in attendance to meet with clients, prospective clients and consultants and discuss their permitting needs. We will be in Booth #1023. Please stop by and visit us.

Registration information is available on ICSC’s website.

* Image created by Matt Banks - freedigitalphotos.net.

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

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While much of the uncertainty regarding affordable housing requirements in NJ remains, the questions involving the applicability and future of the 2.5% nonresidential development fee were answered yesterday. Acting Governor Kim Guadagno signed into law legislation that reestablishes the exemption from the fee for eligible projects. Perhaps the most broadly applicable exemption provides that projects which obtain preliminary or final site plan approval prior to July 1, 2013 are not subject to the development fee provided that building permits are issued by December 31, 2015.

The prior exemption from the fee expired July 1, 2010. The new legislation also provides for the reimbursement of fees paid subsequent to July 1, 2010, unless already spent by the municipality in connection with an affordable housing development. A developer must seek such reimbursement within 120 days of the effective date of the bill.

“With the economy still very much in flux, the suspension of the non-residential development fee will assist New Jersey’s non-residential real estate to get back on track, produce the jobs, taxable revenue and ratables this state desperately needs,” said New Jersey Department of Community Affairs Commissioner Lori Grifa, who oversees the State’s affordable housing development efforts.

For the full text of the legislation, click here.

* Photo courtesy of FreeFoto.com.

Douglas J. Janacek Co-Chairs the Gibbons Real Property & Environmental Department.

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On August 18, 2011, DEP Commissioner Bob Martin and DOT Commissioner James Simpson released a set of guidelines to revamp and apply consistency to New Jersey’s land leasing process for State Lands. A panel of ten State Agencies was convened to analyze the current lease policies and compile a Lease Valuation Report that offers recommendations on leases for Tidelands; Linear Corridor Projects (other than Tidelands); Publicly Bid, Market-Based and Nominal Fee leases; Telecommunications Towers and Antennas, Aquaculture, and leases Related to Transportation Corridors. The guidelines will be adopted by all State agencies, with most of the guidelines implemented immediately.

The panel reported an honest and critical view of the current system for valuing certain types of leases labeling it simply as “broken.” The panel noted that some fee schedules are terribly outdated and that certain rules and statutes prevent the maximization of compensation to the State for the use of its land.

The new guidelines serve two public purposes: 1) to ensure that the State and its Citizens receive fair compensation for the use of State land and 2) to reduce the environmental impact of those that require use of State lands for private projects.

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On August 15, 2011, the New Jersey Department of Environmental Protection (NJDEP) issued proposed Final Rules to implement the Site Remediation Reform Act (SRRA) adopted in May 2009. These rules are intended to be the final implementation step in the phased transition of New Jersey’s site remediation process from NJDEP command and control to private oversight by Licensed Site Remediation Professionals (LSRPs). Instead of NJDEP overseeing every step of a cleanup, the LSRP, licensed by a 13-member Licensed Site Remediation Professional Board with investigative and disciplinary powers, is responsible for making day-to-day decisions about a clean-up. Certain categories of cleanups remain under NJDEP oversight, such as where the responsible party has a history of non-compliance or has failed to meet mandatory deadlines. The rule proposal appeared in the New Jersey Register on August 15, 2011 and can be viewed online. Comments can be submitted until October 14, 2011.

The proposal includes major amendments, repeals and new rules intended to fully implement the new LSRP oversight remediation paradigm. The proposed Final Rules provide for the following:

• Amending the Administrative Requirements for the Remediation of Contaminated Sites (ARRCS) rules, the Underground Storage Tank (UST) rules and the Industrial Site Remediation Act (ISRA) Rules to remove all provisions related to the phase-in period;
• Recodifying all administrative requirements from the ISRA Rules and UST rules to the ARRCS rules;
• Adding mandatory timeframes for completion of remedial investigation and implementation of remedial action;
• Repealing and replacing the current Technical Requirements with new performance-based Technical Requirements, intended to allow more flexibility in addressing contamination and potential exposure pathways. Many of the existing Technical Requirements will be recast as a new series of technical guidance documents providing direction on how to achieve the performance-based goals;
• Amending the Discharges of Petroleum and Other Hazardous Substances rules to require compliance with both a facility’s discharge cleanup and removal plan and the ARRCs rules; and 
• Reformatting text where needed to make the rules easier to understand, to correct typographical and grammatical errors, and to update cross-references.

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The New Jersey Appellate Division delivered a rebuke to the state’s Department of Environmental Protection (DEP) on August 1, finding that DEP’s Commissioner ignored undisputed evidence and made critical legal errors in holding that two development projects did not qualify for an exemption from the strict requirements of the Highlands Water Protection and Planning Act. The court’s decision in Lakeside Manor v. State of New Jersey Department of Environmental Protection reversed the Commissioner’s decision, finding that the developer had satisfied all statutory requirements for the exemption.

The statute, which was enacted in 2004, contains an exemption from its regulatory provisions for major projects that had received at least one of a specified list of land use approvals and at least one of a specified list of DEP permits by March 29, 2004. Jacinto Rodriguez, the president and owner of two development entities, obtained such approvals for both projects well before the deadline: subdivision and site plan approvals in 1999, and DEP permits for sewer lines in 2000. Based on these and other approvals, Rodriguez commenced construction of the projects.

The projects were not yet complete when the statute came into effect, so Rodriguez filed a combined application with DEP for a “Highlands Applicability Determination” for the two projects. DEP initially denied the application, citing doubts about whether the approvals were still in effect, but Rodriguez sought an adjudicatory hearing, and an Administrative Law Judge (ALJ), in his recommended decision, concluded that the projects qualified for the exemption. DEP’s Commissioner, however, rejected the ALJ’s recommendation, and determined that the projects were not eligible for the exemption. Both entities appealed the final decision to the Appellate Division.

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In early 2011, several bills were introduced to encourage the installation of Electric Vehicle (EV) charging stations. Senator Greenstein introduced Senate bill 2603, in January, which would require the New Jersey Turnpike Authority and the South Jersey Turnpike Authority to provide EV charging stations at the service areas along the toll roads, allocating 5% of the parking spaces to EV stations. The bill was reported out of the Senate Environment and Energy Committee on February 14. In March, another bill, S2784, also introduced by Senator Greenstein, would require new shopping center developments to allocate 5% of the parking spaces to EV charging stations. Both of these bills have been sitting since the Spring. Nonetheless, even in the absence of legislative mandates, EV stations have been popping up in NJ and NY. One of the newest ones announced is in Avalon, NJ.

Touted as the first EV charging station at the Jersey shore, Avalon opened its 24 hour charging station on August 5 in front of its public safety building. Under a public-private arrangement with U-Go Stations, the firm has built and will maintain the charging station and pay the town a percentage of the revenue generated. At the moment, there is not much competition. A search of EV charging stations within 150 miles of Newark, revealed 73 charging stations, two of them in Newark itself and the majority of them in Manhattan and Connecticut. Many of the locations are public parking lots, anticipating the future needs of their customers. Others are colleges and universities. In Connecticut, a number of Whole Foods markets have EV charging stations.

It is unclear exactly who is using these charging stations now. The first battery electric car, the Nissan Leaf, was introduced in December 2010, although other major manufacturers have announced the development of EVs. Moreover, the number of EVs is likely to increase because of new fuel efficiency standards announced requiring cars and trucks to meet the equivalent of 54 mph by 2025.

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On the weekend of June 24-26, 2011, the New Jersey Institute of Continuing Legal Education (“NJICLE”) in cooperation with the New Jersey State Bar Association (“NJSBA”), and New Jersey Corporate Counsel Association, held its annual Environmental Law Section Forum Weekend (“the Forum”). Taking place in Avalon, New Jersey, the Forum featured three days of seminars covering various hot-button environmental topics including, Funding for Remediating Sites, Vapor Intrusion, the LSRP Program, Non-Governmental Organizations’ Perspectives on Issues and Resolutions, the well-known NJDEP v. Occidental case also referred to as the Lower Passaic River litigation, Climate Change, and rounded out the weekend with two programs on Ethical Issues including Alternative Fee Arrangements and Multi-Party Settlements.

David Brooks of Gibbons P.C. was the moderator and a panelist for the Vapor Intrusion presentation, an issue that has received increased attention in recent years from both US EPA and New Jersey. Other speakers at the Forum included not only legal practitioners but the New Jersey Department of Environmental Protection, Non-Profit Organizations, and Private Sector Companies. Jeannie Fox, President of the New Jersey Board of Public Utilities gave a keynote speech during the Forum focusing on solar issues in New Jersey.

As a testament to the increased interest in environmental topics as well as the historical success of the Forum, program attendance increased over last year. Attendees earned 11.4 Continuing Legal Education credits including several highly sought after ethics/professionalism credits.

Sandro G. Ocasio is an Associate in the Gibbons Real Property & Environmental Department.

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On Thursday, July 21, 2011, Nancy A. Lottinville, Esq., Counsel to Gibbons P.C.’s Newark based Real Property & Environmental Department was awarded the Virginia S. Mueller Outstanding Member Award by the National Association of Women Lawyers, the first national bar association for women established in 1899. Ms. Lottinville, along with six other attorneys chosen from NAWL’s nationwide membership, accepted the award at NAWL’s Annual Meeting held at the Waldorf Astoria Hotel in New York City. NAWL presents the Outstanding Member Award to NAWL members for exemplary contributions to NAWL. Ms. Lottinville’s contributions include several years of service on multiple committees including the 2011 Co-Chair of the Annual Meeting Logistics Committee, as well as Program Committee member for the 2010 New Jersey NAWL Night of Giving and the 2011 New Jersey Supreme Court Appellate Advocacy Program.

Ms. Lottinville is the Co-Chair of the Women’s Initiative Community Outreach Committee at Gibbons. Her practice focuses on real estate development and redevelopment, land use permitting and commercial real estate transactions for developers of shopping centers, retail stores, banks, franchisors and mixed commercial - residential developments, as well extensive land use due diligence investigations for regional and national investors in a variety of real estate development projects.

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The 2011 edition of the Chambers USA Guide to America’s Leading Lawyers for Business features 10 Gibbons practice areas and 18 individual attorneys ranked in the top tiers. The firm has appeared in the New Jersey section of the Chambers guide since its inception, but the 2011 version includes the highest total number of firm practices and attorneys to achieve the distinction of a Chambers ranking.

“It is a great accomplishment in and of itself to achieve a Chambers ranking, but the addition of new attorneys to the rankings, and the upward mobility within the rankings, are even more impressive,” says Patrick C. Dunican Jr., Chairman and Managing Director of Gibbons. “What that says is that Gibbons does not rest on its laurels, that the firm and our attorneys are constantly striving to provide ever more exceptional legal and client service.”

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. Chambers and client testimonials, excerpted from this year’s guide, highlight the Gibbons Real Property & Environmental Department that ranked in the guide for New Jersey:

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This week marks both the one-month mark since the International Council of Shopping Centers’ (ICSC) annual RECON conference, as well as the end of the first half of 2011. RECON attendance surpassed 30,000 attendees for the first time since 2008, but still remains substantially off attendance levels reached several years ago. Although there was a fair amount of activity at this year’s show, particularly in the retail area on the second floor of South Hall, impressions of the climate for getting deals done were mixed, much like the economic indicators which have been circulating in recent months. Nevertheless, cautious optimism seems to be a fairly common theme in the retail sector for the remainder of 2011, and somewhat more enthusiastic optimism for 2012 and beyond.

In many communities, agendas remain light at land use boards, so there is space available for new applications for development as the market improves. Meanwhile, we can look forward to the upcoming ICSC Idea Exchange in Philadelphia on October 11-13 (note that these dates are several weeks later than usual), and the National Conference and Dealmaking in New York on December 5-6. Gibbons will be exhibiting at both shows. Please stop by our booth and visit us.

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

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On Monday, January 3, 2011, the Environmental Protection Agency published in the Federal Register, 76 Fed. Reg. 5,370 (Jan. 31, 2011), a Notice of Opportunity for Public Input on the Potential Addition of Vapor Intrusion Component to the Hazard Ranking System (the “HRS”). Should this proposal become a rule it would add another contamination pathway to analyze in connection with listing sites on the National Priorities List (the “NPL”).

The HRS is the principal tool used by EPA to determine which contaminated sites to place on the NPL. Under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), which was enacted in 1980 and amended in 1986 by the Superfund Amendments and Reauthorization Act (“SARA”), EPA was required to develop a mechanism to identify sites posing the most serious and immediate threat to the environment or human health and create the list of those sites, constituting the NPL. The HRS was developed to handle that directive.

The HRS is a numerical system that takes into account four potential contamination pathways: 1) groundwater migration; 2) surface water migration; 3) soil exposure; and 4) air migration. During the preliminary assessment and site inspection phase of a site remediation, these four pathways are evaluated using three categories: 1) likelihood that a site has released or has the potential to release hazardous substances into the environment; 2) characteristics of the waste; and 3) people or sensitive environments affected by the release. A score is assigned to each pathway based on this analysis and a formula is employed to determine an overall score, which ranges from 0 to 100. A site with a score of 28.50 or more is eligible to be placed on the NPL.

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The Brownfield Reimbursement Program (the “Program”), a New Jersey State initiative designed to reimburse developers up to 75% of costs incurred to remediate a brownfield site, has run out of money and is temporarily shut down. This development arrives on the heels of a recent New Jersey Department of Environmental Protection (“NJDEP”) announcement that, effective May 3, 2011, applications to the Underground Storage Tank Fund, a similar initiative to help homeowners remove USTs, will not be reviewed or processed due to insufficient funds.

Effectuated under the Brownfields and Contaminated Site Remediation Act of 1998, the Program was available to any party that is not liable under the Spill Compensation and Control Act N.J.S.A.58:10-23.11g. Funding for reimbursement under the Program was derived from tax revenues and appears to be a victim of the general budget crisis.

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On Thursday, June 9, 2011, Russell Bershad, Co-Chair of the Gibbons Real Property & Environmental Department, will moderate a panel, "State of the Market: Drill down on all facets of development, finance, law and economic development" at ScheinMedia's 5th Annual New Jersey Real Estate Conference. The New Jersey Real Estate Conference has become the business standard for the state's most influential professionals from the real estate, finance, legal, and governmental communities.

This half-day conference will be held at the Harborside Financial Center - Atrium between Plazas II and III, in Jersey City, New Jersey from 2:30 - 6:30 pm.

As a Real Property & Environmental Law Alert valued reader, you will receive a 20% registration discount for this conference. Please click here to register and enter the code GPCNJREC to receive the discount!

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The long-awaited “time of application” law, which locks in zoning under New Jersey’s Municipal Land Use Law at the time an application for development is filed, takes effect today. The law was intended to undo the “time of decision” rule under which the New Jersey Supreme Court, in Manalapan Realty v. Township Committee, 140 N.J. 366 (1995), decided that a municipality could change its zoning to negatively affect or even prohibit a project which was already under review by the municipal planning board. As a result, developers often were at peril if community opposition developed during the review and approval process and a change in regulations followed.

As of today, the development regulations which apply to a project will be those in effect on the date the application is filed with the municipal land use board. The new law, S-82, approved as P.L. 2010, Chapter 9 and codified at N.J.S.A. 40:55D-10.5, allowed municipalities a year to revise and update their development regulations. That year has elapsed, and municipalities are now presumed to have gotten their zoning house in order.

Beginning today, developers will be accorded the ability to rely on the development regulations which are in effect at the time they file their application, without fear of an unexpected zoning amendment if opposition develops to their proposal. The law which takes effect today follows a number of unsuccessful efforts in recent legislative sessions to enact a “time of application” rule. Finally, its time has come.

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

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For the first time, the LexisNexis Environmental Law & Climate Change Community has honored a select group of blogs that they believe set the online standard for the practice area. This Real Property & Environmental Law Alert is among those they named in their 50 Top Environmental and Climate Change Blogs for 2011.

According to LexisNexis, "The Top 50 Blogs for the Environmental Law & Climate Change Community recognizes preeminent thought leaders in the blogosphere and creates an invaluable content aggregate for all segments of the environmental law and climate change practice. Most good blogs provide frequent posts on timely topics, but the authors in this year’s collective take their blogs to a different level by providing insightful commentary that demonstrates how blogs can—and do—impact the practice of environmental and climate change law."

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Last month, the New Jersey Supreme Court issued an opinion in Town of Kearny v. Discount City of Old Bridge, which refined and further complicated the process of condemning a leasehold interest. The decision also called into question condemnation provisions in existing leases.

The atypical facts in the case likely led to the complex conclusion. The Town of Kearny designated an industrial area as an area in need of redevelopment pursuant to the Local Redevelopment and Housing Law. At least one property owner, who leased its property to various lessees, objected to the designation and subsequent adoption of the redevelopment plan and designation of a redeveloper. Years later, after the original redeveloper dropped out, Kearny designated the complaining landlord as the redeveloper. The landlord then requested that Kearny condemn the leasehold interests on the property so that the landlord could hold the property free and clear of the leasehold interests.

The landlord, acting on behalf of Kearny in the condemnation proceeding, offered one of the tenants $250,000, including $50,000 for relocation costs, for the value of its leasehold. The tenant submitted a counteroffer of $3 million, which was rejected. No appraisals or further negotiations took place.

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One of the problems with electric cars (EVs) is - what do you do when the battery runs down? Currently there are 500 charging stations in the United States and 400 of them are in California. In an attempt to address the dead battery problem and encourage purchase of EVs, on March 21, 2011, the New Jersey State Senate introduced Bill S2784 (the “Bill”) which requires owners of shopping center developments to include charging stations. Under the Bill, owners of a “shopping center development” must equip not less than five (5%) percent of the parking spaces for the shopping center development with electric vehicle charging stations. Moreover, such stations must be available for use during the hours of operation of the shopping center development.

The term “shopping center development” is defined by the Bill as “a privately owned and operated commercial development that is or is to be owned and managed as a unit consisting of a building or series of buildings on a common site together with adjacent parking area of no less than 100 parking spaces to which the public is invited.”

The Bill proposes that shopping center owners can recoup “costs of compliance” with the Bill by imposing charges on motorists for EV charging . Therefore, shopping center owners will be required under the Bill to erect signage stating the price per unit of time, unit of voltage, or other measure of usage, as determined by the New Jersey Board of Public Utilities (the “BPU”) to be charged to the motorist for such service. No shopping center owner would be permitted to sell electricity at a price that exceeds the maximum amount per unit set by the BPU. Under the Bill, the BPU is directed to adopt standards for a schedule of prices. A comment period and public hearing on the schedule of prices is required to be held by the BPU before the per unit price is set.

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Today, the New Jersey Department of Environmental Protection (NJDEP) published a proposed rule outlining circumstances in which the department would consider a waiver of environmental regulations that stand in the way of economic development. NJDEP will be holding a hearing on the proposed rule on April 14, 2011, at 3:00 pm.

The rule follows the Governor’s “Common Sense Principles” outlined in Executive Order No. 2 which focused on the need to reduce the high costs and regulatory burdens that are thought to impede growth and opportunity in the State of New Jersey.

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New Jersey case law has consistently held that new or modified development ordinance provisions apply to pending land use applications, even if the proposed zoning was specifically introduced to thwart a pending application. This has historically been known as the "time of decision" rule. On May 5, 2011, the time of decision rule will run out of time.

Recognizing the fundamental chilling impact on developers who commit substantial time and money to a project only to have the rules changed by a municipality after the game has already started, the Legislature amended the Municipal Land Use Law to provide that the development regulations in effect on the date of submission of an application govern the review and decision with respect to that application. This legislation was enacted on May 5, 2010, to become effective one year later in order to give municipalities time to revise and update their ordinances.

Accordingly, for those development applications submitted on or subsequent to May 5, 2011, the time of decision rule will no longer apply. Although municipalities will no longer be able to rezone reactively as a substitute for thorough and comprehensive planning or in reaction to public opposition to the application, the question now will be: Is an application that is deemed "incomplete" sufficiently "submitted" to be protected against changes to a municipality's development ordinance?

Douglas J. Janacek is a Director in the Gibbons Real Property & Environmental Department.

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On February 17, 2011, the Assembly unanimously adopted bill A 2722. The bill, which is intended to implement some of the findings of the Red Tape Review Group, would amend the Administrative Procedures Act and provide administrative law judges (“ALJs”) with more tools to streamline contested administrative law cases. Interestingly, however, the bill would also strip the Commissioners of the New Jersey Department of Environmental Protection (“DEP”) and Department of Community Affairs (“DCA”), as well as some others, of their power to review, modify, or reject ALJs’ decisions in contested cases.

Currently, once a contested case is forwarded by the department to the Office of Administrative Law, the case is assigned to an ALJ, and a trial-like hearing is held. Upon completion of the hearing, the ALJ issues a report and decision with recommended findings of fact and conclusions of law. The department head (i.e. Commissioner of the DEP) then has 45 days to adopt, reject, or modify the recommended report and decision before the decision becomes final.

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For the first time, the LexisNexis Environmental Law & Climate Change Community is honoring a select group of blogs that they believe set the online standard for the practice area. This Real Property & Environmental Law Alert is among the nominees.

According to LexisNexis, they selected the nominees based on timely topics, quality writing, frequent posts and that certain something 'extra' that keeps a web audience coming back for more. They described our blog as follows:

“A rotating group of contributors writes about transactional real estate, development and redevelopment, and environmental law. Although there is some focus on developments in New Jersey, New York, Philadelphia and Delaware, the content is also national in scope.”

Readers are invited to comment and support their favorite nominees. We urge you to click here and give us your support for this blog and our postings. The deadline for comments is February 28, 2011.

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Howard Geneslaw, a Director in the Gibbons Real Property & Environmental Department, will be a panelist at the 2011 Land Use Update event on February 16, 2011, sponsored by the New Jersey Institute for Continuing Legal Education. This all day program will provide in-depth coverage and discussions of recent developments in New Jersey land use law.

Focusing on the latest trends and strategies in land use law, topics of discussion include:

• Case Law “Year in Review” Update
• Legislative Update
• Regulatory Update
• COAH/Affordable Housing Update

The program will run from 9:00 am to 4:00 pm and is being held at Mayfair Farms in West Orange. Click here to register.

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One perennial criticism leveled at the Department of Environmental Protection (“NJDEP”) is that it takes too long to issue permits. There have been a long list of initiatives intended to ensure that the NJDEP makes permit decisions which are predictable and timely. Indeed, Commissioner Martin has repeatedly commented on the need to ensure that NJDEP perform efficiently and focus on servicing all stakeholders - including applicants, and included this goal in his 2010 Vision Statement for the department. At long last, NJDEP appears to be taking concrete steps to implement efficiencies in the permit process. On January 27, 2011, NJDEP announced that it would begin to tackle this problem by changing the way it processes the most common land-use permits for contaminated sites and landfill closures.

Effective February 1, 2011, applications for land use permits such as Freshwater Wetlands, Flood Hazard and CAFRA will be processed by a special unit within the Site Remediation Group. The Office of Dredging and Sediment Technology has dealt with many of these issues over the years and will now process all land use permits for remediation projects ranging from site clean-up to landfill closure.

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Crucial to New Jersey’s Five-Year Exemption and Abatement Law is the time within which an application for the tax exemption or abatement must be filed with the municipal tax assessor. A recent Tax Court of New Jersey decision provides the first published opinion interpreting a crucial provision of the statute used to calculate such period of time. Under N.J.S.A. 40A:21-16, written application for a tax exemption or abatement must be made to the municipal tax assessor within 30 days (including Saturdays and Sundays) following the completion of an improvement, conversion alteration, or construction on the property for which tax abatement or exemption is sought. The statute defines “completion” of a project as the date on which same is “substantially ready for the intended use”.

In Lowe’s Home Centers, Inc. v. City of Millville, decided last November, defendant City of Millville rescinded plaintiff’s tax abatement and exemption more than two years after it had been approved by the municipal tax assessor on the grounds that plaintiff’s application for the abatement and exemption was received by the tax assessor after the statutory deadline. The facts show that plaintiff constructed a retail store, together with infrastructure improvements that included sanitary sewer facilities, water lines and public street improvements, on property located in an area of rehabilitation. The construction was undertaken in accordance with a development agreement with the city and with the expectation that the property would receive a five-year tax exemption and abatement. A few days after the issuance of the certificate of occupancy for plaintiff’s project, the Millville tax assessor sent plaintiff a letter that incorrectly advised plaintiff that it had 30 days from the date of the letter within which to submit a completed application for the tax abatement and exemption. Plaintiff sent its application within the deadline set forth in the assessor’s letter, and also within 30 days from plaintiff’s soft opening for employees and family, which plaintiff stated was the date the building was completed. More than two years later, on the advice of a new tax assessor, Millville rescinded plaintiff’s tax abatement and exemption, claiming its application was late because it was not received within 30 days of the issuance of the certificate of occupancy for the project.

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Douglas Janacek and Russell Bershad, Co-Chairs of Gibbons Real Property & Environmental Department were each recognized as leading real estate practitioners in recent industry publications.

Doug was one of 12 lawyers to be included in a feature story on the leading real estate attorneys in the state in New Jersey & Company's November/December issue.

Douglas Janacek’s career goal has been 'to be all inclusive,' and since joining Gibbons in 1986, he’s done just that. Janacek has worked in all aspects of residential as well as commercial, office, and industrial development real estate law, including zoning, planning, and permitting, as well as represented green building and sustainable design residential projects ...

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Experienced New Jersey developers and land use attorneys understand the challenges that face an applicant when the proposed use is not expressly permitted in the municipality’s zoning district where the subject property is located. The challenge is only more complicated if the proposed use involves novel or unfamiliar technology such as renewable energy. However, in New Jersey, the government has been proactive in welcoming renewable energy projects through grants and legislation, making New Jersey definitely the place to be if you want to develop property geared towards the creation of a renewable energy facility powered by solar or wind.

The New Jersey Municipal Land Use Law (“MLUL”) has shed a ray of sunshine onthose developers who wish to construct a solar or wind renewable energy facility. Developers of a solar or wind renewable energy facility must be aware of N.J.S.A. 40:55D-66.11. This section of the MLUL expressly holds that a municipality must permit as-of-right the construction of a renewable energy facility when the subject property is located in one of the municipality’s industrial districts. The only conditions being that the property (or properties) be: (1) comprised of 20 or more contiguous acres; and (2) under common ownership. The statute defines “renewable energy facility” as a “facility that engages in the production of electric energy from solar technologies, photovoltaic technologies, or wind energy.”

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As more and more business owners and homeowners in New Jersey take advantage of the incentives available to build and maintain solar energy systems and solar panels, it’s important that such investments be protected from unwanted disputes with neighbors. A little known New Jersey statute may be able to help.

Recent statistics on New Jersey’s Clean Energy Program website indicate that New Jersey is the fastest growing market for solar power in the United States, and has the largest number of solar panel installations, second only to California, where neighborly disputes over trees blocking solar panels, solar panels impairing views, causing glare and other general nuisance claims are becoming more and more common. To avoid the same pitfalls in New Jersey, those installing solar panels should take advantage of New Jersey’s Solar Easements Act (N.J.S.A. 46:3-24, et. seq.), on the books since 1978.

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New Jersey, like most other states, has a three-tier alcohol distribution system: (1) manufacturers and suppliers sell to wholesalers; (2) wholesalers sell to retailers; and (3) retailers sell to consumers. New Jersey’s Alcoholic Beverage Control Laws (“ABC Laws”), which are enforced by the Director of the Division of the Alcoholic Beverage Control (“ABC”), have allowed certain New Jersey farmers and wineries to skip the wholesalers and sell directly to retailers and consumers. Out-of-state wineries and wine aficionados cried foul and challenged the special privileges given to New Jersey producers. On December 17, 2010, the United States Court of Appeals for the Third Circuit issued its opinion in Freeman v. Corzine and sided against the New Jersey ABC.

The primary issue in the case was whether the Dormant Commerce Clause of the Constitution prohibits states from imposing restrictions benefiting in-state economic interests at the expense of out-of-state interests. In short, the Court had to determine whether allowing New Jersey plenary or farm winery licensees to operate outside of the rigid three-tier distribution system gave New Jersey businesses an unfair advantage.

The Court recognized that when “all out-of-state wine, but not all in-state wine [must] pass through an in-state wholesaler and retailer before reaching consumers, the discriminatory character of the system is obvious.” The Court further found that there was no legitimate purpose for this unequal treatment. As a result, the court determined that the privileges that allowed plenary or farm winery licensees to sell directly to retailers or consumers were unconstitutional.

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It is not uncommon in New Jersey for businesses to fight tooth and nail to prevent competitors from obtaining development approvals. This month, in In the Matter of the Issuance of Access Conforming Lot Permit No. A-17-N-N040-2007 by the New Jersey Department of Transportation for Block 136, Lots 2 and 3 in Mahwah Township, New Jersey, the Appellate Division dragged the New Jersey Department of Transportation (“NJDOT”) into the fight and provided objectors with another path to delay or even prevent a business competitor from moving into town.

Typically, objections are fought in front of the relevant municipal land use board and later in court. In the Mahwah case, a gas station along Route 17 objected to an application by Pilot to construct a competing service station and convenience store approximately 0.2 miles away on Route 17. In addition to objecting during the Zoning Board of Adjustment hearings, the objector filed a letter and traffic data with the NJDOT objecting to Pilot’s application for a major access permit and waiver for lot frontage pursuant to the State Highway Access Code.

The NJDOT rejected the objector’s submission on the basis that the State Highway Access Code does not allow direct public input and directed the objector to air its grievances during the Zoning Board of Adjustment hearings. Upon the grant of the access permit and waiver, the objector appealed the NJDOT’s decision to the Appellate Division.

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On November 13, 2010, Nancy Lottinville appeared on One on-One with Steve Adubato on his series on public television. As a featured guest, Ms. Lottinville discussed her background and experience throughout her career in all areas of land use, development, governmental permitting, and multiple aspects of transactional real estate law.

“Nancy has an impressive career representing national and regional retail, restaurant, office, and multifamily developers, as well nonprofits and local planning boards,” says Patrick C. Dunican Jr., Chairman and Managing Director of Gibbons. “But her broader professional goals to support women at all levels both within our firm, and in the commercial real estate industry as a whole, make her an even more compelling interview subject.”

Produced by the Caucus Educational Corporation, One-on-One reaches more than 10 million households in six states (NJ, NY, CT, PA, DE, and MD). The program features the absorbing, real-life stories of the area’s notable business, political, academic, and creative innovators, highlighting their experiences and accomplishments in an engaging and relatable way. Host Steve Adubato relies on his broad knowledge and conversational, inquisitive interviewing style to inspire unexpected exchanges.

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Earlier this month, the New Jersey Appellate Division decided and approved for publication Cortesini v. Hamilton Township Planning Board, a case that addressed the issue of whether a developer must apply for a variance in connection with a pre-existing non-conforming condition created by a prior/non-appealable development approval. The Court’s answer was a resounding “no” based on the facts presented.

In Cortesini, the applicant, Wal-Mart Real Estate Business Trust, applied to the Hamilton Township Planning Board in 2009 for amended site plan approval along with associated bulk variances to renovate an existing Wal-Mart Store. The proposed development contemplated a 3.6% increase in area to the current 156,963 sq. ft. store and the addition of 46 parking spaces. There was a pre-existing non-conforming condition on the property.

In 2001, the initial developer of the shopping center had obtained subdivision approval for the development of the shopping center containing the Wal-Mart store. A year later, Wal-Mart successfully secured a site plan approval that authorized the construction of the Wal-Mart as currently configured. However, the initial approvals failed to identify the need for a parking area setback variance that was clearly required pursuant to the Township’s zoning ordinance.

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For the seventh year in a row, the Gibbons Real Property & Environmental Department exhibited at the International Council of Shopping Centers' ("ICSC") National Conference and Deal Making Idea Exchange in America's Hall II at the Hilton New York earlier this month.

The buzz at the show was optimistic this year, similar to the upbeat mood at the September PA/NJ/DE Idea Exchange in Philadelphia, with over 6,000 attendees and 340 exhibitors "deal making" throughout the Hilton New York and the Sheraton New York Towers & Hotel. Along with the six Gibbons attorneys, the show was also attended by shopping center owners, developers, managers, marketing specialists, investors, lenders, retailers, and other professionals.

Gibbons will be exhibiting at both the Philadelphia and New York shows again next year - we look forward to seeing you there!

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

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The Gibbons Real Property & Environmental Department will once again exhibit at the International Council of Shopping Centers (“ICSC”) National Conference & Deal Making Idea Exchange at the Hilton New York on December 6-7.

The Department’s booth will be in the same location as prior years, #490 in America’s Hall II. Stop by and meet with some of the Department’s six attorneys who will be attending. Show hours are Monday, December 6, from 9:00 am to 5:30 pm, and Tuesday, December 7, from 8:30 am to 4:00 pm.

In September, the Department exhibited at the ICSC’s PA/NJ/DE Idea Exchange on September 15-16, at the Pennsylvania Convention Center in Philadelphia. We reported that the attendance and mood had both improved over the year before. We are hopeful that the positive mood will continue.  See you in New York!

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

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In what appears to be a case of first impression in Pennsylvania, the Commonwealth Court of Pennsylvania found that a party has standing to appeal a township’s grant of subdivision/land development approval even if that party was not present at, or did not participate in, the township proceedings on the application. This decision, filed on October 28, 2010, is in sharp contrast to established Pennsylvania case law concerning the standing of a party to appeal the decision of the Zoning Hearing Board, where that party’s appearance or objection at the Zoning Hearing Board level is a prerequisite to its ability to appeal. See Leoni v. Whitpain Township Zoning Hearing Board.

In the matter of John J. Miravich and Patricia J. Miravich, et al. v. Township of Exeter, Berks County, Pennsylvania, No. 2133 C.D. 2009, the Commonwealth Court drew a distinction between land development approval applications and zoning hearing board applications with respect to an appellant’s standing to appeal. In Miravich, the developer filed an application for preliminary subdivision and land development approval. That application was considered by the Township’s Planning Commission and by its Board of Supervisors, and ultimately approved by the Board of Supervisors. There is nothing in the meeting minutes of the Planning Commission or Board proceedings which indicate that the Miravichs or the any of the other named appellants received notice of, or attended, those meetings.

The appellants timely filed their land use appeal to the Berks County Court of Common Pleas. The Township then sought to dismiss the appeal, asserting that the appellants had no standing to appeal the Board’s action because they had not appeared during any of Township proceedings. The Common Pleas Court found in favor of the Township and dismissed the appeal.

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Due to the current economic climate and project financing difficulties, Section 276(7)(c) of the New York Town Law was recently amended to allow planning boards greater flexibility in extending subdivision approval beyond the two ninety (90) day extensions previously allowed.

Town Law 276(7)(c) provides that a conditional final subdivision plat expires 180 days following the date of the resolution of approval unless all conditions are satisfied. It further authorizes planning boards to grant two extensions, having a duration of ninety (90) days each, after expiration of the original 180-day timeframe for satisfaction of conditions of approval. The costs of satisfying conditions of approval can be significant. If the conditions are not satisfied by the end of the second extension, the subdivision approval becomes null and void, and the applicant would then be required to commence the approval process all over again at significant time and expense.

The amended law now permits planning boards discretion to extend conditional final plat approval for additional ninety (90) day periods, with no limitation on the number of extensions available, “if, in a planning board’s opinion, such extension is warranted by the particular circumstances.” The bill, S07241, had a relatively quick turn-around time by the legislature after being sponsored by Senator Andrea Stewart-Cousins from the 35th Congressional District in March of this year. The bill received Senate approval in April, Assembly approval in June and was signed into law by Governor Paterson on September 17, 2010 as 2010 N.Y. Laws 522.

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For a real estate developer in New Jersey, it seems that there is no “repose” when it comes to the finality of land use approvals. Repose you ask? While the word may garner images of warm weather days at poolside, a developer can only think of repose as the day the appeal period expires on hard-won land use approvals, especially after facing objecting citizens at multiple hearings.

Under New Jersey’s Municipal Land Use Law (MLUL), land use approvals can be appealed within 45 days of a publication of a Notice of Decision in the town’s ordinance designated “official” newspaper. Under the MLUL, the developer is responsible to publish the Decision unless the town’s ordinance directs otherwise. The date of first publication starts the 45 day appeal period. On that 46th day following publication, the appeal period expires and “repose” commences, and the approval has become final and unappealable. A developer can then move forward with its project, secure in the knowledge that repose has begun ... or not.

Last week, the New Jersey Supreme Court heard arguments in Hopewell Valley Citizens' Group v. Berwind Property Group Development Co. where a Hopewell Township citizens group with a long list of environmental concerns about Berwind’s extensive office project petitioned the Court to exercise its discretion to extend the appeal period by a mere six days. In support, the Citizens argued that they filed their appeal timely, if only Hopewell Twp. had verbally advised them of the correct date of publication of the Notice of Decision. So much for repose!

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Roman lawyers were timed by water clocks which they realized could be slowed by the addition of dirt or sand and thereby gaining more time to argue. Hence lawyers are often cited for “muddying the waters.” In the case challenging the US Environmental Protection Agency’s stormwater rules for construction sites, it is the court that has muddied the waters. By holding the suit in abeyance, but keeping the problematic standard in place, the Seventh Circuit Court of Appeals has managed to confuse all of the parties.

The USEPA issued construction stormwater rules in December 2009, which were immediately challenged by the National Association of Home Builders and Wisconsin Builders Association in the Seventh Circuit as concerns the numeric turbidity value. The rules were scheduled to go into effect on February 1, 2010. EPA then filed an unopposed motion to vacate the numeric limitation pending a study to issue a new rule in November 2012. The Seventh Circuit essentially denied the motion as to vacating the numeric turbidity standard but apparently agreed to hold the suit in abeyance until February 2012 by granting the EPA’s motion “to the extent that the case is remanded to the EPA for further proceedings.” Thus, the numeric limitation stands: it is enforceable even though EPA has admitted in its brief that the process by which it was developed was flawed. A truly muddy situation.

John H. Klock is a Director in the Gibbons Real Property & Environmental Department.

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Howard D. Geneslaw, Esq., PP, AICP, a Director in the Gibbons Real Property & Environmental Department, will be a speaker at the 2010 New Jersey Planning Conference on Friday, November 5, 2010, in New Brunswick, New Jersey. Howard’s topic will be “The Due Diligence Process: Protection for Both the Public and Private Sectors.” Two consulting planners will also be a member of the panel.

The conference, which runs from November 4-5, is jointly sponsored by the New Jersey Chapter of the American Planning Association and by the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. It will include many sessions which relate to a variety of planning topics.

For more information or to register for the conference, click here.

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On Wednesday evening, October 19, 2010, the New Jersey Business and Industry Association (NJBIA) presented its annual "Awards For Excellence" to eleven New Jersey businesses for laudable Business Expansion, Environmental Quality, as Outstanding Employers, and for Public Service. Gibbons P.C. was amongst four companies honored for Public Service, joining two Gibbons clients, Peloton Advantage, LLC, the winner of the Business Expansion Award, and Hall’s Warehouse Corp., honored with a NJ Businesses Environmental Quality Award.

The "Gibbons Cares" community outreach initiative was recognized with a Public Service Award for its support of five focus areas: women in transition, fellowships fostering leadership in the next generation of New Jersey minority students, the City of Newark and its institutions, the needs of New Jersey food banks and the support of charities assisting Gibbons’ extended "family."

Peloton Advantage, LLC serves the pharmaceutical, biotech and medical device industries by providing publication planning, medical content development and sales training services. Peloton’s "good news" business experience is that it has experienced dramatic and rapid expansion in both numbers of employees, with a 428% increase, and in revenues, up 386% over the last five year period.

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On October 15, the United States Environmental Protection Agency (“USEPA”) released a draft plan addressing its RE Powering Americas Land Initiative. The Initiative is designed to encourage development of renewable energy projects on current and formerly contaminated land and mine sites. The plan focuses on providing useful resources for communities, developers, industry, state and local governments or anyone interested in reusing such sites for renewable energy development.

The tools on the USEPA website include mapping and fact sheets for sites where USEPA and the U.S. Department of Energy National Renewable Energy Lab are analyzing the potential for wind, solar, or small hydro development. The mapping tool provides USEPA’s site name and identification information, the program managing the site; a link to the site's cleanup status information; and specific acreage and renewable energy resource information. Another interactive map offers information on the various federal and state incentives available for such projects.

As part of the plan, USEPA will reach out to prospective developers and investors though meetings and webinars. The first such webinar is scheduled for October 21, 2010, at 3:00 pm EDT. It will provide an overview of how siting renewable energy on brownfields benefits communities and how local governments can strategically plan for renewable energy siting on contaminated sites. Speakers will discuss their experiences on siting renewable energy project on contaminated sites, including challenges and advantages associated with using contaminated land.

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All of us are intrigued by the concept of utilizing a clean, renewable energy source to generate abundant and cheap power for our homes and businesses. Some of us have even investigated installing a renewable energy system, but have come away disappointed due to onerous regulatory obstacles and the high cost associated with these installations. That is, unless you are looking into installing a solar energy power facility in New Jersey.

We explored the business case for solar energy in a recent article published by the Association of Corporate Counsel New Jersey Chapter. In addition, on August 19, 2010, Gibbons sponsored a solar energy conference in Woodbridge, NJ, attended by over 500 business owners, senior executives and industry representatives.

Douglas J. Janacek is a Director in the Gibbons Real Property and Environmental Department. Nancy A. Lottinville, Counsel to the Gibbons Real Property & Environmental Department, assisted in the preparation of this post.

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Attendance was up and the mood was upbeat at the International Council of Shopping Centers (ICSC) PA/NJ/DE Idea Exchange on September 15-16 at the Pennsylvania Convention Center in Philadelphia. For the 7th consecutive year, Gibbons P.C. exhibited at the show. Five Gibbons lawyers, from the firm’s Philadelphia and Newark offices, attended.

Unlike the last two years, when attendance was lower and the mood was palpably negative, this year's show was better attended and there was a noticeable change in attitude as more deals and more opportunities seemed to be on the horizon. Attendance remained solid well into the afternoon. Howard D. Geneslaw, a Director in the Real Property & Environmental Department at Gibbons, said, “The atmosphere is much different this year, much more positive than it has been for several years, and many of those attending have more appointments this year and are making more progress on deals. This a positive sign in view of the continuing uncertainty we see in economic reports.”

The Philadelphia show is a precursor to the New York gathering, scheduled for December 6-7, 2010, and the positive mood bodes well for a successful New York show with better attendance and a more positive outlook. Gibbons will be exhibiting at the New York show in America's Hall II - come by and say hello.

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With energy costs high and the focus on combating global warming, there is an impetus toward encouraging the development of Green Buildings. Buildings account for 39% of the total energy usage in the U.S., two thirds of the electricity consumption and 1/8 of the water usage. Building codes, setting minimum standards for construction, now include standards for energy efficiency. Green Codes are creeping in.

New Jersey’s Energy Subcode requires that a building permit applicant show compliance as part of the application. This code applies to low-rise residential and commercial buildings Under the Energy Code Compliance and Residential Prescriptive Packages, see N.J.A.C. 5:23-2.15(f)1.vi and N.J.A.C. 5:23-3.18. Compliance must be with the Energy Subcode and the 2006 International Energy Conservation Code (IECC) plus 20%. These are energy efficient standards for cooling and heating.

New York State has its Energy Conservation Construction Code of 2007 which is based on the 2004 IECC standards. This code becomes effective in December 2010. Pennsylvania has adopted Alternative Residential Energy Provisions 2009 based on 2009 IECC standards.

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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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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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On August 6, 2010, the Appellate Division upheld the decision of the Director of the New Jersey Division of Alcoholic Beverage Control (“ABC”) to issue a special concessionaire permit to the proposed Benihana restaurant in the controversial Meadowlands Xanadu Project. The ruling will allow Xanadu bars and restaurants to avoid acquiring costly plenary retail consumption licenses from existing East Rutherford licensees.

Typically, to serve alcoholic beverages in New Jersey, a bar or restaurant must obtain a plenary retail consumption license. State law caps the number of plenary retail consumption licenses available in each municipality, with fewer than 20 plenary retail consumption licenses currently in circulation in East Rutherford, where Xanadu is located. Instead of purchasing one of the existing licenses, which The Record reports would have set back each Xanadu restaurant $500,000 (if the existing licensees were even willing to sell), the Xanadu businesses will now qualify for a $2,000 special concessionaire permit issued directly from the State ABC.

To obtain a special concessionaire permit, a business must still must meet three basic criteria:

1. be located on property owned or controlled by the State;
2. enter into a contract with the State or a political subdivision authorizing the sale of alcoholic beverages; and
3. demonstrate its fitness to serve alcohol.

Thus, although the ruling is good news for public/private development partnerships on State-owned or controlled property, it does not open the flood gates for the issuance of special concessionaire permits for every large entertainment complex.

Jennifer P. Smith is an Associate in the Gibbons Real Property and Environmental Department.

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On July 23, 2010, Governor David Patterson signed into law, legislation that amends the New York State Multiple Dwelling Law to define permanent and transient occupancy. The new illegal hotel law forbids most residential apartment units to be rented out for stays less than 30 days.

This legislation may be a reaction to City of New York v. 330 Continental LLC, a 2009 Appellate Division - First Department holding, which relied on the fact that the critical terms “transient” and “permanent” are not defined in either the Multiple Dwelling Law or the New York City Zoning Resolution. The ambiguity created by this omission has hindered the City of New York from taking enforcement actions against illegal hotels, a problem in New York City, where landlords have been able to convert vacant apartments into temporary housing for tourists, a practice made easier by internet advertising. According to the law’s co-sponsor, State Senator Liz Krueger, over 300 New York apartment buildings had such temporary rental rooms.

Mayor Bloomberg praised the new law, stating:

When housing designated for permanent occupancy is illegally converted into a hotel, unsafe conditions are created, the residential character of City neighborhoods is harmed and the supply of much-needed units of housing is depleted. The bill provides a clear definition of what constitutes transient and permanent occupancy, which will allow City agencies to issue summonses and initiate other enforcement actions against illegal hotels.

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New Jersey’s Highlands Water Protection and Planning Act (Highlands Act), which created and granted substantial powers to a regional Council, has engendered significant controversy, especially with respect to the strict development restrictions it imposes within a statutorily defined preservation area. Certain redevelopment projects, however, are exempt from those restrictions, and a recent Appellate Division upheld the New Jersey Department of Environmental Protection’s (NJDEP) interpretation of key statutory provisions when it determined that a multi-purpose redevelopment project qualified for such an exemption.

Since its enactment in 2004, the Highlands Act has spawned a number of judicial opinions regarding its constitutionality, its retroactivity, and the validity of certain implementation regulations promulgated by NJDEP. (One such case is the subject of a recent post by Gibbons attorney Christina Fullam.)

In In re August 16, 2007 Determination of NJDEP of Exemption, the Appellate Division reviewed NJDEP’s decision to grant Christ Church an exemption from the statute for a project on a 100-acre lot in Rockaway Township that was already the site of office and industrial buildings constructed by a previous owner in the 1990s. The exemption application required NJDEP to determine whether the project qualified for the exemption as a “reconstruction” project that was within 125% of the existing “footprint” of “lawfully existing impervious surfaces” and did not increase that impervious surface by one-quarter acre or more.

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In 2007, just as regulations began to force New Jersey development into its urban areas, where the use of redevelopment is a virtual necessity, the New Jersey Supreme Court decided Gallenthin Realty v. Paulsboro. There, the Supreme Court rejected a municipality's designation of an area in need of redevelopment because the underlying investigation was insufficient under the Local Redevelopment and Housing Law criteria.

In the years since Gallenthin, New Jersey courts have repeatedly rejected redevelopment area designations as not meeting the statutory criteria, thereby stalling redevelopment efforts throughout the State and creating developer angst about the future of development in New Jersey.

But recently, the Appellate Division upheld a city’s designation of a portion of its central business district as an area in need of redevelopment. In Suburban Jewelers, Inc. v. City of South Plainfield, the Court found that the City's preliminary investigation of the area met the substantial evidence burden because it contained specific findings on the condition of each property and detailed how those conditions met the applicable statutory criteria. The report further demonstrated how those conditions were detrimental to health, safety, and welfare and to surrounding properties.

This decision offers some guidance as to the necessary elements of a redevelopment investigation and gives the real estate industry a glimmer of hope that redevelopment remains a viable mechanism in New Jersey in the post-Gallenthin world.

Michael Miceli is an Associate in the Gibbons Real Property and Environmental Department.

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The Supreme Court of the United States recently declined to review a multi-plaintiff citizen challenge to the New Jersey Highlands Water Protection and Planning Act. The case, Shope v. State, which has been floating through the New Jersey court system since April 2007, finally met its end when the Supreme Court denied the petition for certiorari on June 28, 2010.

At the trial level, the plaintiffs based their challenge on the following constitutional grounds:

• the development restrictions and preservation area boundaries set forth in the statute violated the property owners’ equal protection rights.
• the program initiated to transfer owners’ development rights did not adequately compensate the property owners in the Highlands conservation area.

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A recently enacted New Jersey law encourages the use of solar energy by allowing solar panels to be excluded from the computation of impervious coverage when determining whether a development project complies with impervious coverage limitations. The new law, P.L.2010, c.4 , amends the Pinelands Protection Act, Coastal Area Facility Review Act, Highlands Water Protection and Planning Act, County Planning Act, Waterfront Development Law, and Municipal Land Use Law, as well as laws pertaining to the conversion of age-restricted community developments.

In each of these laws, the amendment defines a solar panel as “an elevated panel or plate, or a canopy or array thereof, that captures and converts solar radiation to produce power, and includes flat plate, focusing solar collectors, or photovoltaic solar cells and excludes the base or foundation of the panel, plate, canopy, or array.” Any solar panel meeting that definition can be excluded when computing impervious coverage.

The new solar panel law is just one of the initiatives which encourages the use of solar and other green energy sources. As recently reported on this blog in a post titled New Jersey Proposes Addition of Solar Power Facilities to its Green Initiative, identical bills, Senate S2126 and Assembly A3139, are pending before their respective house of the New Jersey’s legislature and would amend the MLUL to provide that Solar and Wind Energy Generation Facilities, when installed on the sites of former landfills, quarries and other extractive industries, are permitted uses. If the proposal is enacted, this status would be equally applicable to both public and private sites where landfills, quarries or other extractive industries are closed or closing.

Clearly, New Jersey is serious about alternative energy and is working legislatively to make it a reality.

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

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In New Jersey, it is very typical for a municipality’s building department to refuse to accept a developer’s construction drawings until the developer has received all of its local, county, state, and other applicable agency approvals (e.g. site plan approval, an NJDEP permit; or an NJDOT permit). This should not be happening.

In 2009, the section of the Uniform Construction Code dealing with plan review was amended to state:

[i]f required State, county, or local prior approvals have not been granted, plan review shall proceed provided that the application for permit is otherwise complete and the plan review fee has been paid. No permit shall be issued until all State, county and local approvals are in place.

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In Matter of John G. Molloy, et al, the New York Appellate Division, Second Department reminds us that it is critical to preserve the status quo during the pendency of an appeal by moving for a preliminary injunction. Failure to do so resulted in the dismissal of an Article 78 proceeding challenging the grant of a use variance by the Town of Carmel Zoning Board of Appeals to the Putnam Arts Council, a not-for-profit organization, permitting it to operate in a residential zone. Appellants’ failure to preserve their rights during appellate review allowed construction of the new arts center to be completed and a certificate of occupancy to be issued thereby resulting in dismissal of the appeal as academic when it was eventually heard by the Appellate Division.

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

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“Beach nourishment” and “beach restoration” projects, where sand from other locations (often the ocean bottom) is dumped on a beach to retard erosion or to repair its effects, are expensive. They also raise complex issues of fairness and equity about who should pay for the projects and who should be compensated for their negative effects. In two decision handed down in June, the New Jersey and United States Supreme Courts grappled with another often controversial aspect of these projects: when can beachfront owners allege that the project has actually taken their property, triggering the requirement of “just compensation” found in the New Jersey constitution and the Fifth Amendment to the federal constitution?

The classic “taking,” of course, is when the government exercises its sovereign right of eminent domain, a process that, in New Jersey, is controlled by statute and which has been the subject of a recent Supreme Court opinion. Even without the exercise of eminent domain, the government is deemed to have taken private property whenever the landowner is required to suffer a permanent physical occupation. At least in the development context, however, most takings cases concern “regulatory takings,” which occur when a regulation has such a significant effect on the landowner’s ability to use the property -- when, in the words of Justice Holmes in Pennsylvania Coal Co. v. Mahon, the regulation has gone “too far” -- that the landowner must be compensated. A landowner who asserts that a government action has effected a taking that requires compensation files what is known as an inverse condemnation action, so called because unlike a normal condemnation case, where the government is the plaintiff, the government is the defendant, and the plaintiff-landowner seeks a declaration that a taking has occurred.

The New Jersey and U.S. Supreme Courts decisions handed down in June do not deal with familiar regulatory takings but rather involve, respectively, novel issues of timing and institutional power. In Klumpp v. Borough of Avalon, -- N.J. --, No. A-49-09 (N.J. June 22, 2010), the New Jersey Supreme Court decided on the applicable statute of limitations for takings claims of any sort. In Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, -- U.S. --, No. 08-1151 (U.S. June 17, 2010), a plurality of the U.S. Supreme Court concluded that a judicial decision that fundamentally changes property rights under state law can effect a “judicial taking” that triggers the constitutional requirement of just compensation. While Klumpp seeks to clarify the law governing takings claims in New Jersey, Stop the Beach Renourishment is likely to cause significant uncertainty in the years ahead.

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Solar and Wind Energy Generation facilities may soon join the category of uses designated as permitted of right by New Jersey statute rather than by individual municipal ordinance, thus preempting municipal zoning powers granted under the Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq. (MLUL).

Identical Bills, Senate S2126 and Assembly A3139 are pending before their respective house of the New Jersey’s legislature and would amend the MLUL to provide that Solar and or Wind Energy Generation Facilities, when installed on the sites of former landfills, quarries and other extractive industries, are permitted uses. This status would be equally applicable to both public and private sites where landfills, quarries or other extractive industries are closed or closing.

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Last year, the Appellate Division in TAC Associates v. NJDEP, 408 N.J. Super. 117 (App. Div. 2009) had held that an applicant under the NJ Brownfield Innocent Party Grant, N.J.S.A. 58:10B-5, need not be a landowner at the time of application for such grant. In so ruling, the Appellate Division invalidated NJDEP regulations that imposed an ownership requirement, a requirement absent from the underlying statute.

In January of 2010, the legislature amended the Act to require that the landowner must acquire the property before 1983 and own it until application is made for a grant and the application is granted. On July 15, 2010, the New Jersey Supreme Court reversed the Appellate Division in TAC, holding that the “after the fact” amendment by the legislature clarified the intent of the legislation which the NJDEP gleaned in issuing its regulations.

Justice Rivera-Soto, in dissent, criticized the ruling,

The unvarnished and ugly truth is that, recognizing their error, defendants [NJDEP and NJEDA] scurried -- four years after the fact, six and one-half months after their position had been rebuffed by the Appellate Division, and while this appeal was pending before this Court -- to have the Legislature ratify rules defendants adopted that plainly exceeded the original statutory mandate.

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Last week, Governor Rendell signed the Permit Extension Act ("Act") into law as part of the approval of the budget, breathing life into expired and expiring permits and the development projects they represent.

The Act, found at pages 99-110 of the budget bill, extends the expiration date of many governmental approvals, permits and agreements, including building permits and construction permits, relating to construction and development projects.

What Permits Does It Affect?

The Act applies to certain permits issued under more than thirty statutes, including:

• The Pennsylvania Municipalities Planning Code ("MPC"),
• The Clean Streams Law,
• the First Class City Home Rule Act (applicable to Philadelphia and Pittsburgh),
• The Pennsylvania Sewage Facilities Act,
• The Pennsylvania Construction Code,
• The Storm Water Management Act, and 
• certain permits issued by the Pennsylvania Department of Transportation.

The Act also applies to certain permits issued to condominiums, cooperatives and planned communities.

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Agreements for the sale of real property are commonly contingent upon the contract purchaser's obtaining some sort of development approval. If the approval is not granted, the contract purchaser can walk away from the deal. But what if the landowner wants to challenge the denial? Does the landowner have a sufficient interest in the dispute to step into the contract purchaser's shoes? Last month, the Appellate Division of the New Jersey Superior Court answered in the affirmative. In Campus Associates, L.L.C. v. Zoning Board of Adjustment of the Township of Hillsborough, No. A-0690-08T2, -- N.J. Super. -- (App. Div. June 4, 2010), the court held that a landowner can appeal the denial of a use variance that was sought by a contract purchaser, as long as the application depended on property-specific proofs, and not on factors unique to the applicant.

The case arose in Hillsborough, N.J., where The Richman Group of New Jersey, L.L.C. (Richman) wanted to build affordable housing on a site owned by Campus Associates, L.L.C. (Campus). In 2006, the parties entered into a contract under which Richman would apply for the necessary approvals, and then purchase the property if the approvals were secured. Richman ran into trouble, however, with the township's Zoning Board of Adjustment (Board), which denied its application for a use variance and related bulk variances in early 2008. Richman decided not to appeal, and terminated the contract.

Campus, though, had other ideas. If the variance were granted, it could develop the project itself, or seek to reinstate the contract with Richman, or even seek another contracting partner. So it filed an appeal with the Law Division. But upon the Board's motion, the trial court dismissed the action, finding that Campus did not have "a sufficient stake and real adverseness" regarding the subject matter of the litigation. Campus appealed the dismissal to the Appellate Division, which agreed with Campus, reversed the dismissal, and remanded the matter to the Law Division.

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The Senate Committee Substitute for S-1, which abolishes the Council on Affordable Housing (COAH) and restructures responsibility for affordable housing policy, was approved by the N.J. Senate on June 3 and sent to the Assembly, where it has come to a stop for the summer. NewJerseyNewsroom reports that the COAH bill is among 34 property tax reform-related bills that Assembly Democrats held over the summer in order to analyze them.

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

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An amendment to the Municipal Land Use Law (MLUL) which Governor Christie signed into law on May 4, 2010, will protect developers from municipal zone changes that are rushed through, often as a result of public opposition, to thwart a specific development proposal. Under the new law, which takes effect in one year, the development regulations which apply to a project would be those in effect on the date the application is filed with the municipal land use board.

The new law, dubbed the "time of application" rule, was needed to undo the much-criticized "time of decision" rule under which the New Jersey Supreme Court, in Manalapan Realty v. Township Committee, 140 N.J. 366 (1995), decided that a municipality could change its zoning to negatively affect a project which was already under review by the municipal planning board. That decision involved a proposed Home Depot, which met with substantial public opposition. After the applicant spent significant sums of money acquiring an interest in the property, preparing development plans, retaining experts, submitting its development application, and participating in a number of public hearings, opponents of the project were successful in electing a new township council. The newly constituted council immediately enacted a zoning amendment specifically targeted at Home Depot, as a result of which it was no longer permitted in the zone. The case ultimately reached the New Jersey Supreme Court, which found this sequence of events to be perfectly appropriate.

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Senate Bill S-1, which revises and reforms many of the statutes relating to affordable housing in New Jersey, was voted out of the Senate Economic Growth Committee on June 3rd with amendments. S-1 would abolish the Council on Affordable Housing (COAH) and would allow municipalities to administer their own affordable housing obligations. S-1 would eliminate State imposed calculations of affordable housing need and would permit local governments to take charge of planning for affordable housing.

The Senate Committee Substitute to S-1 incorporates the most recent amendments to the bill. The original bill transferred the authority of COAH to the State Planning Commission. Under the Substitute to S-1, much of this authority has been given to municipalities to determine their affordable housing needs, with decreased state involvement, now transferred to the Department of Community Affairs. This reallocation of power was the heart of the reform plan announced by Governor Christie on May 13. Other measures, also part of the Governor’s plan, were incorporated in the Substitute to S-1, such as priority for development and funding of special needs housing, an affordable housing unit set-aside based on the size of the residential development project, and flexibility for municipalities of provide for a variety of economic incentives to a developer, such as payments in lieu of construction, off-site construction, provision of accessory apartments and Elder Cottage Housing Opportunity Units and rehabilitation that includes affordable units. The statement issued by the Senate Economic Growth Committee outlines and explains the amendments in detail.

On June 10, the Senate approved S-1 by a vote of 28-3 and now heads to the Assembly for consideration.

Howard D. Geneslaw is a Director in the Gibbons Real Property & Environmental Department. Susanne Peticolas, a Director in the Gibbons Real Property & Environmental Department, assisted in the preparation of this post.

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In an announcement made on May 13, 2010, Governor Chris Christie outlined a plan for affordable housing that will abolish the 25 year old Council on Affordable Housing and transfer control for housing plans to local authorities, with review by the Department of Community Affairs ("DCA"). According to Acting DCA Commissioner Lori Grifa, "Unfortunately, the Council on Affordable Housing has often times been more burden than benefit to the point that New Jersey as a whole has fallen far short of its affordable housing goals ... The Governor's new affordable housing plan is a fresh approach that gives more control and flexibility to local governments while limiting state involvement. Ultimately, this plan will result in more affordable housing units being built in communities across the state."

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

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The tables were turned in a case decided by the New York Court of Appeals on February 18. In a reversal of their usual roles, an upstate developer argued that its properties were contaminated, while the Department of Environmental Conservation (DEC) argued that the sites did not require remediation. The court agreed with the developer, and the result could mean significant tax credits for potential redevelopers of contaminated sites throughout the state.

The complete article, as published in In-Sites, can be viewed here.

John H. Klock is a Director in the Gibbons Real Property & Environmental Department. Paul M. Hauge, an Associate in the Gibbons Real Property & Environmental Department, assisted in the preparation of this post.

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The Fair Share Housing Center filed a suit on February 17, 2010 challenging Governor Christie's Executive Order halting the actions of the Council on Affordable Housing.

Content for this blog post is authored by the Gibbons Real Property & Environmental Department.

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On February 9, 2010, Governor Chris Christie issued an Executive Order stopping all work for ninety (90) days on the processing of applications for substantive certification or implementation of the Third Round regulations by the Council on Affordable Housing (COAH). The Executive Order also creates a five-member Housing Opportunity Task Force which is tasked with producing a public report with analysis and recommendations regarding the current COAH rules within 90 days.

On February 8, the Senate Economic Growth Committee continued its hearings relating to Senate Bill No. 1, which would abolish COAH.

Content for this blog post is authored by the Gibbons Real Property & Environmental Department.

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Senator Raymond J. Lesniak announced that on Monday, February 1, the Senate Economic Growth Committee, which he chairs, will begin hearing testimony on his Bill S-1, co-sponsored by Senator Bateman. S-1 would abolish the Council on Affordable Housing (COAH) and establish a streamlined and simple process to comply with NJ Supreme Court mandates that require every municipality maintain a fair share of low- and moderate-income housing.

Content for this blog post is authored by the Gibbons Real Property & Environmental Department.

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Lenders, as we all know, continue to be saddled with under-performing and non-performing commercial real estate mortgage loans. A quick internet search will reveal that many are predicting future defaults on billions and billions of dollars of loans. Amongst many other implications for both the lending institutions and the economy at large, carrying these loans impacts reserve requirements and, in turn, available capital. Potentially, we have the makings of a classic “vicious cycle."

The complete article, as published in In-Sites, can be viewed here.

Shepard A. Federgreen is a Director in the Gibbons Real Property & Environmental Department.

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