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

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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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 EPA has announced that six different New Jersey communities will receive a total of $3.4 million under the agency’s brownfield grant program in FY 2011. The grants will fund assessment and cleanup efforts at contaminated sites so that the sites can be returned to productive use. The grant program, part of EPA’s larger brownfield efforts, will award some $76 million in grants this year, and has awarded over $800 million since its inception. New Jersey’s grants will fund activities at thirteen sites or areas in Newark, Jersey City, Trenton, Elizabeth, Mantua Township, and Maurice River Township.

At the state level, government funding for brownfield revitalization in New Jersey has virtually dried up. As reported on this blog earlier this month, New Jersey’s Brownfield Reimbursement Program has run out of money and is temporarily shut down.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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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 Friday, June 24, 2011, David A. Brooks, Counsel to the Gibbons Real Property and Environmental Department, will moderate a panel, “Vapor Intrusion: Old Problems - New Rules” at the 2011 Environmental Law Section Forum Weekend presented by the New Jersey State Bar Association and the New Jersey Institute for Continuing Legal Education and co-sponsored by the New Jersey Corporate Counsel Association. This full weekend program presents an annual update on environmental law in New Jersey and will also include panels discussing funding for remediation projects, New Jersey’s licensed site remediation professional program, litigation related to the remediation of urban river systems, the role of non-governmental organizations, renewable energy and climate change, and ethical issues.

The conference will be held at the Golden Inn in Avalon, New Jersey from June 24, 2011 through June 26, 2011. Please click here to register.

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Last month, the Environmental Protection Agency published a notice  for “Public Comment on the Development of Final Guidance for Evaluating the Vapor Intrusion to Indoor Air Pathway From Contaminated Groundwater and Soils (Subsurface Vapor Intrusion Guidance)” in the Federal Register. The draft of the Subsurface Vapor Intrusion Guidance was initially released for comment during 2002 and the EPA is planning on issuing final guidance by November 20, 2012.

More recently, the EPA published a Review of the Draft 2002 Subsurface Vapor Intrusion Guidance which summarized portions of the 2002 guidance requiring update. In general, the EPA noted the observed complexity and variables impacting the migration of volatile organic compounds since issuance of the initial 2002 guidance.

Comments must be submitted to the EPA by May 14, 2011. However, the EPA anticipates making another draft of the guidance available for public comment during the Spring of 2012.

David A. Brooks is Counsel to the Gibbons Real Property & Environmental Department.

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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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Institutional controls, regulatory limits on human activity at a site, go by many names. The Department of Defense uses the term “land use controls.” ASTM E2091-00 has elected to use the phase “activity and use limitations.” Traditional real estate lawyers often think in terms of “covenants” or “easements.” Here in New Jersey, the Site Remediation Program uses the term “Deed Notice,” while the Freshwater Wetlands Permit Program has adopted the term “Conservation Restriction or Easement,” N.J.A.C. 7:7A-1.4. Whatever name they go by, institutional controls are intended to regulate human behavior and are used to supplement environmental remediation efforts by reducing the risk of unintended exposure to residual contamination. As a result, institutional controls are critical to the redevelopment of contaminated real estate and cost-effective clean-ups.

There is an ongoing debate over the effectiveness of institutional controls. Regulators, responsible parties and environmental practitioners are increasingly aware of the costs and challenges of using institutional controls. EPA’s Office of Solid Waste and Emergency Response has recently issued a preliminary draft second in what is intended to be a series of guidance documents governing the use institutional controls. EPA is soliciting public comment on this interim guidance document.

EPA’s November 2010 Interim Final Draft is entitled “Institutional Controls: A Guide to Planning, Implementing, Maintaining and Enforcing Institutional Controls at Contaminated Sites.” This document outlines EPA policy regarding institutional controls. The guidance document also presents a discussion of long-term site “stewardship” and enforcement options. EPA, like its state counterparts, is increasing focused on enforcement issues.

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After over a year since its creation, the nature of New Jersey’s Licensed Site Remediation Professional (LSRP) is still unclear. The program, signed into law in May 2009, removes the responsibility for oversight of clean-ups of contaminated sites from the New Jersey Department of Environmental Protection (NJDEP) to a cadre of licensed privately paid professionals. NJDEP will retain direct oversight of more complex sites and will resume direct oversight of LSRP sites under certain circumstances. It will take some time for the kinks in the program to be worked out. Depending on who you speak to, the view of what the LSRP is differs.

When the idea was first proposed, the environmental groups were convinced that the LSRP would be the proverbial “fox in the henhouse.” The concern was based on the fact that the LSRP is selected and paid by the responsible party - the polluter - in the view of these groups. The LSRP decides what needs to be done, how to do it, how much money will be needed to assure the clean-up and when the clean-up is finished. The final “sign off,” the Response Action Outcome (“RAO”) is issued by the LSRP. The RAO gives the responsible party a covenant not to sue by the NJDEP with respect to the property which was remediated.

In December of 2009, Jeff Tittel, Executive Director of New Jersey Sierra Club complained, “The LSRP program is much worse than the fox guarding the henhouse. It’s the fox building the henhouse and certifying that it’s safe.”

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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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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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Irv Freilich and Susanne Peticolas, Directors in Gibbons Real Property & Environmental Department, will be panelists at ABA’s upcoming Regional CLE Workshop on October 27, 2010, titled "The Road Ahead: The Obstacles and Pitfalls to New Jersey’s Implementation of the LSRP Program" at Seton Hall Law School. For more information or to register for the program, click here.

The program will feature interactive panels composed of nationally known environmental lawyers, in-house counsel and consultants who will discuss the details and implications of New Jersey’s Site Remediation Reform Act (SRRA), and in particular the newly minted Licensed Site Remediation Professional (LSRP) program. The impact of the LSRP program on environmental practitioners will be far reaching and extraordinary. From the manner in which environmental consultants will be retained and site investigations and clean-ups accomplished, to the ethical, work product and litigation considerations counsel will need to evaluate and address, the LSRP Program represents a sea-change in the way environmental counsel will practice their trade in the years to come.

The program has already dramatically changed the relationship between the environmental consultant and the client and raised the specter of frivolous suits from disgruntled clients. In addition, NJ Department of Environmental Protection has had to propose revisions to the SRRA interim rules relaxing certain remediation deadlines. These developments highlight the complex issues presented by the transition of New Jersey’s site remediation process from NJDEP command and control to private oversight by LSRPs and underscore the need to keep abreast of a rapidly developing area.

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On October 4, 2010, the New Jersey Department of Environmental Protection (NJDEP) formally proposed revisions to the Site Remediation Reform Act’s (SRRA) interim rules. The revisions impact two important components of the interim rules: remediation deadlines and vapor intrusion investigations. These technical amendments are based upon stakeholder input and are intended to reduce the burden on the regulated community and New Jersey’s newly minted Licensed Site Remediation Professionals (LSRPs). The rule proposal appeared in the New Jersey Register on October 4, 2010 and can be viewed online. Comments can be submitted until December 3, 2010.

When adopting the SRRA, the New Jersey Legislature created a special enforcement mechanism called “direct oversight.” When a site, phase of the clean-up process or condition at the site warrants “direct oversight,” all of the key decisions - especially remedy selection - are made by NJDEP. In direct oversight the responsible party simply pays the bills - NJDEP makes the decisions. The SRRA also provides that when the responsible party misses a remediation milestone, then NJDEP must exercise direct oversight. N.J.S.A. 58:10C-27.

NJDEP’s pending rule proposal relaxes three important remediation milestones established by the interim rules. N.J.A.C. 7:26C-3.3.:

• the deadline for submitting preliminary assessment reports,
• the deadline for immediate environmental concern source control,
• and the deadline for installing free product removal technology at sites containing non-aqueous phase liquids, (generally to March 1, 2011 at the earliest).

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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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On April 19, EPA announced awards of a total of nearly $80 million in grants to communities across the country to support the assessment, cleanup, and redevelopment of brownfield sites. Twelve of the grants, totalling $2.3 million, will go to New Jersey communities, including Camden, Jersey City, Newark, and Trenton.

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

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