DEP - Real Property & Environmental Law Alert

More Streamlining of Permit Procedures for Rebuilding After Superstorm Sandy

Adam C. Arnold — Wed, 24 Apr 2013 12:49:59 -0500

A recent news release on the NJDEP website discusses new efforts by the Christie Administration to streamline vital rebuilding projects necessitated by the destruction caused by Superstorm Sandy. The new rules, which were adopted on an emergency basis on April 16th, are intended to eliminate some of the red tape typically associated with permit procedures, while ensuring the protection of coastal resources and encouraging the rebuilding of a more resilient New Jersey coastline. This is just the latest action taken by the Governor and NJDEP to ease the burden on residents, businesses and municipalities seeking to rebuild. Beginning as early as five days after the storm swept through New Jersey, actions were already being taken to waive permitting requirements for those rebuilding vital infrastructure such as roads and bridges. More recently, the Christie Administration adopted a streamlined process for property owners wanting to rebuild to new elevation standards in flood zones.

Bob Martin, Commissioner of the NJDEP, justified these emergency actions, stating that the “Christie Administration is committed to taking every step possible to help our communities become stronger than ever from this historic storm, including eliminating unnecessary red tape that would needlessly impede the important work ahead. These common sense changes will make it easier for our residents and businesses to continue on the road to recovery while ensuring continued protection of natural resources.” Many activities that require individual permits will now be allowed under general permits or permits by rule. An example of these changes is the use of permits by rule for the maintenance of beaches and dunes in advance of the 2013 hurricane season. A general permit will replace individual permits for projects that create living shorelines with vegetation, sand, organic materials and/or bivalves such as oysters and clams. Countless other measures are similarly aimed at reducing both the time and money that formerly would have been spent on more complex permit requirements.

While these rules are being implemented on an emergency basis for 60 days, there is a concurrent proposal for a permanent rule change, which will be open for public comment for a period of 30-days. Comments can be submitted online until June 5th. A public hearing on the final rule will be held on May 22nd at the Long Branch Municipal Building in Long Branch, New Jersey. Following the 30-day comment period, the NJDEP will respond to any public comments before adopting the permanent rule, which it hopes to do at the expiration of the emergency rule.

Adam C. Arnold is an Associate in the Gibbons Real Property & Environmental Department.

Raising Standards for Rebuilding After Sandy

Adam C. Arnold — Fri, 05 Apr 2013 08:29:28 -0500

For the first time in more than two decades, the Federal Emergency Management Agency (“FEMA”) has updated its Advisory Base Flood Elevation (“ABFE”) maps for New Jersey’s coastal counties. The Christie Administration adopted these new standards as an emergency measure on January 24, 2013, and through formal NJDEP regulations, has now made them permanent. The revised FEMA elevations, which remain subject to change, are anywhere from two to four feet higher on average than the standards that had been in effect prior to Hurricane Sandy. New Jersey residents, particularly those impacted by flooding from Hurricane Sandy, should be aware of this change, as the NJDEP has incorporated these revised maps as the new standard throughout the state for the elevation of reconstructed homes in flood zones.

The Commissioner of the NJDEP, Bob Martin, defended the new standards as more protective of flood-prone properties, and as helping affected residents avoid a dramatic increase in flood insurance premiums once FEMA formally adopts new guidance for flood insurance. One obvious question is how some residents, still struggling to recover financially from the devastation caused by Sandy, are meant to afford such a significant undertaking as elevating their homes. According to a news release on NJDEP’s website, the Christie Administration is looking to help such residents offset this cost by providing funds from the federal Community Development Block Grant. Eligible homeowners could receive up to $150,000 for reconstruction and elevation of their flood-damaged homes, according to the article.

Depending on the amount of damage incurred at a given residence, the elevation revisions may not have immediate consequences. Homes that sustained less than 50% damage are not required to do anything, but are cautioned that they will likely be subject to much higher flood insurance costs if they choose not to elevate in accordance with new standards. If, on the other hand, a residence sustained more than 50% damage, the owner must elevate to the new standard plus one foot, as required by the Flood Hazard Area Control Act. Under the amended rules, property owners rebuilding to the new standards will not need to apply for a special NJDEP Flood Hazard Area permit, which should result in savings on permit fees and design costs, as well as saving the time that it would normally take for NJDEP review.

]]>Without a doubt, many residents will view these revised elevation requirements as just the latest in a long line of headaches caused by Hurricane Sandy. The state, however, views these measures as essential to the recovery and future safety of its residents and their homes. As Commissioner Martin commented, “we must never allow ourselves to forget the scope of destruction from Sandy. It is absolutely critical that we rebuild stronger and more resilient in the aftermath of this historic storm.” Perhaps that is easier said than done for many residents, but just like the next storm, these new standards are coming whether New Jersey homeowners are ready or not.

*Photo courtesy of FEMA Region II Coastal Mapping Basics.

Adam C. Arnold is an Associate in the Gibbons Real Property & Environmental Department.

Appellate Court Upholds NJDEP "Waiver Rule"

Paul M. Hauge — Wed, 27 Mar 2013 08:20:35 -0500

In a decision that gives the green light to an important component of the Christie Administration’s “Common Sense Principles” approach to regulation, the Appellate Division has upheld the New Jersey Department of Environmental Protection’s (NJDEP) “waiver rule,” which permits the department to waive strict compliance with many of its regulations in defined circumstances. Full implementation of the rule will have to wait, however, as the Appellate Court invalidated a variety of forms and guidance documents that NJDEP had posted on its website without going through the normal rulemaking process required by the Administrative Procedure Act (APA).

As we reported last year, NJDEP formally promulgated the waiver rule in April 2012, after a contentious, year-long rulemaking process that saw over 500 members of the public submit many hundreds of comments. The proposal grew out of an executive order from Governor Christie that directed all agencies to establish “Common Sense Principles” for regulations and to apply those principles in a variety of ways, including the adoption of rules that provided for waivers of conflicting or unduly burdensome rules.

The rule, which is set forth on NJDEP’s website, allows NJDEP to waive strict compliance with its rules in limited circumstances, in a manner that is consistent with the agency’s environmental mission. But there are significant limitations on that authority. A waiver may be granted only when at least one of the following criteria are satisfied: (1) the applicant is subject to conflicting rules, (2) strict compliance would be unduly burdensome, (3) the waiver would result in a net environmental benefit, or (4) the waiver is justified by a public emergency. The waiver rule does not apply to a number of categories of requirements, including requirements imposed by statute or by federal regulations; numeric or narrative standards that protect human health; and requirements concerning remediation funding sources and other financial matters.

]]>Soon after its promulgation, and as we also reported, a coalition of environmental and labor organizations challenged the waiver rule in court. They argued that the rule was ultra vires - beyond the authority granted NJDEP by the Legislature - and that it lacked sufficiently clear standards to guide NJDEP in applying it to particular circumstances. The appellants also pointed to the Legislature’s inclusion of waiver provisions in a number of specific statutes as evidence that it did not give NJDEP any authority to grant waivers in any other situations.

In a decision released on March 21 and captioned In re N.J.A.C. 7:1B-1.1 et seq., the Appellate Division rejected these arguments, and upheld the waiver rule as a valid exercise of authority granted by the Legislature. Writing for the three-judge panel, Judge Parrillo pointed to the broad authority the Legislature has given NJDEP, and to NJDEP’s frequent practice of adopting wide-ranging regulatory programs that apply to several different programs and are based on a number of different statutes. The absence of an explicit legislative grant to NJDEP of a “general” power to waive its regulations was not dispositive, wrote Judge Parrillo, for such a power is implicit in the delegation of broad authority to make rules.

“Simply stated,” he concluded on this point, “the power to promulgate a regulation implies the incidental authority to suspend or waive its application in certain limited, well-defined circumstances provided such exemption does not circumvent any legislative enactment or purpose, or federal law, is consistent with the agency’s statutory core mission and objectives, is accomplished through a properly adopted regulation pursuant to the APA, and establishes appropriate and clear standards for the exercise of agency discretion.”

The Court also rejected the appellants’ contention that the rule lacked adequate standards to guide NJDEP’s exercise of its discretion. It is enough, said the Court, if regulations are “sufficiently definite to inform those subject to them as to what is required.” The standards in the waiver rule were definite enough to satisfy this flexible standard.

It was not, however, a complete victory for NJDEP. The Appellate Division held that NJDEP had acted illegally in posting guidance documents, FAQs, and other information on its website without going through the APA-required rulemaking process. Applying the six-factor test set forth in the Supreme Court’s 1984 decision in Metromedia, Inc. v. Director, Division of Taxation, the Court found that, contrary to NJDEP’s protestations, the postings “do more than implement the waiver rule; they establish the rules of the game.” In creating and posting the documents, the Court held, NJDEP had engaged in de facto rulemaking without following the notice-and-comment procedure prescribed by the APA. Accordingly, the Court invalidated the websites documents to the extent that they went beyond the terms of the waiver rule itself.

The decision represents a major victory for the Christie Administration in its ongoing effort to provide relief from what it sees as unnecessary and overly restrictive regulation, especially at NJDEP. For the first time, the broadly worded waiver rule gives NJDEP sweeping authority to grant waivers from regulatory requirements. The practical effect of the waiver rule may be a different story: according the department’s website, as of March 25, 2013, since it began accepting waiver applications on August 1 2012, NJDEP had received just twenty-five requests for a waiver, had denied or rejected as incomplete eleven of those requests, and had yet to grant a waiver pursuant to the waiver rule.

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

NJDEP Posts FAQs on Post-Sandy Flood Elevation Standards

Sandro G. Ocasio — Mon, 11 Feb 2013 09:54:02 -0500

The New Jersey Department of Environmental Protection (“NJDEP”) recently issued its answers to frequently asked questions (FAQs) regarding the emergency amendments to New Jersey’s Flood Hazard Area Control Act Rules. The emergency regulations were signed into law by New Jersey Governor Christie on January 24, 2013, in the wake of Hurricane Sandy. The new regulations adopt the Federal Emergency Management Agency’s (“FEMA”) updated Advisory Base Flood Elevation (“ABFEs”) maps as the rebuilding standard for the entire state. The rules set minimum elevation standards for the reconstruction of houses and buildings in areas that are in danger of flooding. Because the rules are complex and so many officials and the public are affected, NJDEP issued the FAQs explaining the benefits of the amendments, who is covered, and tips for getting started.

Highlights of the rule amendments include the following:

1) Adopts height and construction requirements in FEMA’s Advisory Base Flood Elevation maps as a state standard for reconstruction.

]]>2) Allows property owners who rebuild to the ABFEs (plus one additional foot, as has been required by the New Jersey Flood Hazard Area Control Act since 2007) to do so via Permit By Rule, thus, eliminating the need for property owners to apply for DEP's Flood Hazard Area permits, saving them substantial time and money.

3) Allows “wet floodproofing” for non-residential buildings, whereby a building may flood, but will structurally withstand the water, as an alternative to requiring elevations or dry floodproofing.

The regulations will have dramatic ramifications on flood insurance premiums. By way of illustration, if a property owner currently in an "A zone" at 4 feet below the BFE elevation is reclassified as a higher threat "V zone" and takes no action, that property will be subject to an approximate annual premium of up to $31,000 because they will be rated at a higher risk. If the same owner were to rebuild to the suggested BFE and appropriate construction standards, the annual premium would be approximately $7,000. If that owner were to rebuild 2 feet above the BFE with the construction standards for their new zone, the annual premium would be approximately $3,500. Under this illustration, the property owner could save up to $27,500 annually.

Hurricane Sandy had an unprecedented impact on New Jersey residents. Developers and property owners, particularly those affected by the hurricane, should take advantage of NJDEP’s guidance and better familiarize themselves with the new rules. Adhering to the regulations will help protect the property from flood damage in the future and help save on significant costs.

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

Action Required: NJDEP Implements New Vapor Intrusion Screening Levels

Sandro G. Ocasio — Thu, 24 Jan 2013 13:29:10 -0500

The New Jersey Department of Environmental Protection (“NJDEP”) recently issued new vapor intrusion screening levels (“VISL”) and related guidelines, which will have an immediate impact on existing remediation sites. The screening levels were updated to reflect the changes in toxicity values and risk-based equations set forth in the United States Environmental Protection Agency’s (“USEPA”) most recent Regional Screening Level (“RSL”) Tables. NJDEP implemented the new VISL as of January 16, 2013. Parties conducting remediations and their Licensed Site Remediation Professionals will need to analyze how these new screening levels impact their sites.

The procedures and associated timeframes in which to conduct a site evaluation based on the new VISL varies as follows:

Unrestricted use final remediation documents for ground water issued prior to January 16, 2013 require no further investigation for the vapor intrusion (“VI”) pathway.
Restricted use final remediation documents for ground water issued prior to January 16, 2013 require an evaluation of the VI pathway as part of the biennial certification; an assessment of the order of magnitude changes using the new VISL; and, based on this information, implementation of additional remediation as required.
Remedial Action Workplans for ground water issued prior to January 16, 2013 require a review of existing data for order of magnitude changes using the new VISL and, based on this information, implementation of additional remediation as required.
If none of the aforementioned scenarios exist, there is a 90 day period to evaluate all existing site conditions and data using the new VISL. The 90-day review period terminates April 16, 2013.

A VISL implementation flowchart is available here.

]]>As a result of the new VISL, the screening levels for some compounds, including tetrachloroethene, have increased while five others, including 1.3-dichlorobenzene, have been eliminated completely. In addition, the new VISL tables contain two new compounds: naphthalene and 2-methylnaphthalene. Accordingly, under the new VISL, certain cases may no longer meet the criteria as an Immediate Environmental Concern or Vapor Concern and may be reclassified where appropriate.

The new NJDEP master table of VISL is available here.

NJDEP will host a session on the new VISL on Wednesday, January 30th, from 1:00 - 3:00 PM in the DEP Public Hearing Room, in Trenton, New Jersey. The seminar will also be available via webinar.

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

Environmental Issues a Growing Concern for Companies

Gibbons P.C. — Fri, 05 Oct 2012 12:51:24 -0500

As companies in the northeast region take advantage of an improving real estate market, in the face of aggressive agency enforcement, and complex environmental programs and policies, the need for environmental counsel to assist with transactions, navigate potential pitfalls and mitigate future liability, has become essential. In a recent article published by The Metropolitan Corporate Counsel, three new Gibbons Directors - William Hatfield, Camille Otero, and David Freeman - discuss:

the firm's strategic decision to expand the practice group;
the growth of the environmental law market;
and how their experience can assist clients in this expanding field.

Click here to read the full article.

Cause for Concern? NJDEP to Score Contaminated Sites Under the Remedial Priority Scoring System

Sandro G. Ocasio — Wed, 18 Apr 2012 14:06:19 -0500

The New Jersey Department of Environmental Protection ("NJDEP") will soon release scores for contaminated properties pursuant to the Remedial Priority Scoring ("RPS") system. The RPS system was mandated by the Spill Compensation and Control Act (N.J.S.A. 58:10-23.16) as amended by the Site Remediation Reform Act ("SRRA").

Under the statute, the factors that NJDEP may consider in ranking the sites include:

the level of risk to the public health, safety, or the environment;
the length of time the site has been undergoing remediation;
the economic impact of the contaminated site on the municipality and on surrounding property; and
any other factors deemed relevant by the NJDEP.

The RPS system is a computerized modeling system designed to help the Department to categorize sites based on potential risk to public health, safety or the environment. The RPS model utilizes a variety of information, including ground water, soil, and vapor intrusion, sampling data to determine a site score. Once the RPS score is determined, the site is catalogued for relative ranking against sites with similar scores and assigned a specific category number from 1 through 5. Category 1 represents the lowest score (least potential risk to public health) and Category 5 represents the highest score (greatest potential risk to public health).

]]>Should the RPS scores trouble remediating parties? On the one hand, the Department states that it will use the RPS system simply to assist it in allocating its Site Remediation Program resources and that categories represent potential risk and are not indicative of compliance. On the other hand, NJDEP admits that the RPS system is a tool to help it evaluate if direct oversight of remediation activity by the NJDEP is warranted now that the typical remediation will be overseen by a private Licensed Site Remediation Professional. Indeed, N.J.S.A. § 58:10C-27(b)(4) states that a site ranked by the “category requiring the highest priority pursuant to the ranking system” may be subject to direct oversight.

But fear not. NJDEP advises that “if a Category 5 site is being actively remediated pursuant to the regulations and in compliance with the mandatory and regulatory timeframes then it would not be considered for direct Department oversight.” Additionally, the responsible party is allowed a one-time opportunity to review their initial score and category and may provide NJDEP with supplemental information that should have been submitted if it believes the initial score is based on old or incorrect data. Therefore, direct oversight is not automatic, however, a party expecting a Category 5 ranking should be diligent in ensuring it is in compliance with all regulations. A party receiving a Category 5 ranking will have the opportunity to convince NJDEP that it deserves a lower score.

NJDEP anticipates that the category determinations will be finalized and posted on the SRP website in September of 2012. Originally, NJDEP intended to send letters to responsible parties with their draft scores last November. This exercise was pushed back, but will need to occur by June in order for NJDEP to have a sufficient comment and review period prior to the September posting. After September, NJDEP will then update its listing during the first year at 6 month intervals and then quarterly from that point forward.

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

Gibbons Environmental Attorneys Publish in New Jersey Law Journal

Gibbons P.C. — Wed, 04 Apr 2012 09:14:02 -0500

Irvin M. Freilich, Team Leader of the Gibbons Environmental Practice, Susanne Peticolas and Paul M. Hauge (Director and Associate, respectively) authored the lead article in the Environmental Law section of the February 27, 2012, New Jersey Law Journal. The article, entitled “Step Aside or Step Up?,” discusses recent decisions from the New Jersey Appellate Division in Magic Petroleum Corp. v. Exxon Mobil Corp. and from the Third Circuit in Raritan Baykeeper v. NL Industries, Inc. These environmental cases involve the often-confusing doctrine of primary jurisdiction, under which courts -- sometimes -- abstain from rendering a decision in a given case to allow an expert agency to make its own determination first. You can read the entire article here.

The Extension of the Permit Extension Act is on the Move, To Be Reviewed Today By Assembly Appropriations Committee

Jason R. Tuvel — Mon, 12 Mar 2012 15:15:44 -0500

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.

]]>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. S743 proposes that the definition of “approvals” be amended to include any “agreement with a municipality, county, municipal authority, sewerage authority, or other governmental authority for the use or reservation of sewerage capacity.”

S743 appears to be the bill that may amend the Permit Extension Act to help developers that need to wait a little longer for the economy to bounce back to save projects for which they have spent significant funds in obtaining approvals for development.

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

The Permit Extension Act May Keep Extending

Jason R. Tuvel — Tue, 24 Jan 2012 09:09:54 -0500

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.

NJDEP to Issue Draft Remedial Priority Scores for Contaminated Sites

Susanne Peticolas — Wed, 02 Nov 2011 18:31:09 -0500

In the next few weeks, responsible parties for some 12,000 known contaminated sites in New Jersey will be receiving a letter with a draft Remedial Priority Score (RPS) for their particular site compliments of the New Jersey Department of Environmental Protection (NJDEP). The NJDEP has not specified how the rankings will be used, although the RPS system has been described by the NJDEP as “a triage tool to sort sites for further consideration.”

Under the Site Remediation Reform Act (SRRA), N.J.S.A. 58:10C-1 et seq., passed in May 2009, the NJDEP is required to establish a ranking system for active remediation sites based on risk to public health, safety and the environment, the length of time the site has been undergoing cleanup, economic impact, and other relevant factors. To that end, NJDEP designed the Remedial Priority Scoring system which uses modeling assumptions on data gathered from a number of databases on the 12,000 known contaminated sites. Certain sites are excluded from the RPS process, including homeowner sites, sites undergoing operations and maintenance monitoring, and unknown source cases.

The computerized process attempts to provide relative rankings of active sites using selected data from the Geographic Information System (GIS) tools, multiple geographic databases and layers, the New Jersey Environmental Management System (NJEMS), the Known Contaminated Sites (KCS) report, and groundwater sampling data. Ongoing development of the model will eventually incorporate contaminated soil data and corresponding pathways. All sites will receive a tiered ranking between one and five, with tier five representing the highest contamination risk.

]]>The RPS system attempts to minimize subjective human interpretations and anecdotal data, and thus, the final score is only as reliable as the data upon which the model is based. Score accuracy thus depends on the quality and quantity of the available data. Responsible parties can take action to improve a score by submitting additional information. For example, “closed” pathways between the source of contamination and receptors, institutional and engineering controls, and the absence of an impact to groundwater all act to reduce the cumulative risk of a site. Responsible parties will have sixty (60) days to challenge the ranking by submitting new information or an explanation of why the proposed ranking is inaccurate or fails to account for certain data.

While it is not clear what use NJDEP will make of these rankings, one can be sure that creative lawyers will be analyzing potential uses for them particularly in the area of toxic torts, environmental cost recovery cases and property transfers. Responsible parties should be on the look out for these draft RPS rank letters and analyze them carefully.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department. Brett S. Theisen, an Associate in the Gibbons Financial Restructuring & Creditors' Rights Department, assisted in the preparation of this post.

New Jersey Releases Sensible Lease Process for State Lands

LexBlog — Mon, 22 Aug 2011 08:31:13 -0500

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.

]]>One of the changes is the elimination of perpetual term leases or easements for Tideland and Linear projects as well as a switch from a parcel-by-parcel negotiation and appraisal method to a flat square footage-based rate. As a point of perspective, the DEP alone owns 800,000 acres of fish and wildlife habitats and parks often traversed by utility lines. A switch to square footage-based rates both increases the revenue generated from a utility intent on developing on State property while at the same time compels them to use as little of the land as possible.

Leases will also have built-in annual adjustments of at least 2.5% thereby forcing lessees to accommodate for inflation. Another practical shift was to allocate more revenue generated from the leasing system back to the program or agency responsible for managing the leases.

Undoubtedly, the new guidelines will affect developers of offshore wind generation projects particularly in light of the Offshore Wind Economic Development Act, a bill that was recently passed to foster development of this type of green energy.

According to Bob Martin “The State’s process for valuing leases was long overdue for a major overhaul. This is our opportunity to bring this system up to date, to provide more predictability for business and to get the best deals and most fair compensation for the people of New Jersey.”

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

NJDEP Proposes New Rules for Site Cleanups

Susanne Peticolas — Tue, 16 Aug 2011 08:38:37 -0500

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.

]]>According to NJDEP Commissioner Bob Martin,

It is a priority of the Christie Administration to clean the more than 16,000 contaminated sites across the State. This is an important step to help us more quickly and efficiently achieve that important goal. It will benefit public health and the environment, and will make underutilized properties available more quickly for redevelopment, benefiting economic growth.

The proposed rules were developed with the input of interested stakeholders. A public hearing on the proposed rules is scheduled for September 13 at 9 am in the first floor public hearing room at the DEP building, 401 East State Street, Trenton. NJDEP will accept written comments until October 14, addressed to Janis Hoagland, NJDEP, Office of Legal Affairs, Mail Code 401-041L, PO Box 402, 401 East State Street, 4th Floor, Trenton, NJ 08625-0402, ATTN: DEP Docket No. 12-11-07. The transition of New Jersey’s site remediation process from NJDEP command and control to private oversight by LSRPs presents complex issues for the department and the regulated community. Thus it is important for the regulated community to analyze the proposed rules and take advantage of NJDEP’s efforts to respond to stakeholder comments.

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

Court Overrules DEP, Finds Developer Was Entitled to Exemption From Highlands Act

Paul M. Hauge — Wed, 10 Aug 2011 10:02:40 -0500

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.

]]>The Court found unequivocally that the Commissioner lacked any basis for denying the exemption. With respect to the land use approvals, the Court noted that the Commissioner had overlooked both the stipulation of DEP’s counsel that the approvals remained valid, and clear evidence that the approvals were in fact effective as of the cut-off date. As for the Commissioner’s finding that the DEP sewer permits were no longer valid, the Court criticized both the legal conclusions and the factual findings of the Commissioner. The issue here was whether the development entities’ failure to comply with certain conditions of the permits (obtaining a mapping revision or waiver for wetlands from EPA) rendered the approvals, as the Commissioner had found, “null and void.” Not so, said the Appellate Division. While violation of a permit condition may be grounds for its revocation, revocation cannot occur without a proper proceeding, and may not even be the appropriate remedy for the violation. Moreover, even revocation does not mean the permit ceased to exist as of the date of the violation. The Commissioner, said the Court, could not do an end-run around these protections by simply declaring the permits null and void. Finally, the record evidence clearly showed that revocation of the permits was not warranted; DEP’s own staff had recognized that construction authorized by the sewer permits did not encroach on any EPA-regulated wetlands. In short, the Commissioner was wrong on the law and on the facts.

As previously covered in this blog, the Highlands Act continues to generate judicial opinions about its legality and its implementation, as well as new legislative developments. The Lakeside Manor decision may stand as a warning to future Commissioners that reviewing courts will scrutinize their decisions closely, even where the decision appears to give effect to the statute’s protective purposes.

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

Electric Vehicles - Charging Ahead in New Jersey

Susanne Peticolas — Tue, 09 Aug 2011 08:16:55 -0500

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.

]]>Recently, Nissan announced that it was developing a system for the Leaf to power households from its battery. Just think, in the future you can run to Whole Foods in your Leaf for a quart of milk and some extra electricity to run the household.

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

NJICLE Holds its Annual Environmental Law Section Forum

LexBlog — Tue, 02 Aug 2011 09:18:23 -0500

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.

Proposed Legislation Will Require Shopping Center Developments in NJ to Provide Charging Stations for Electric Vehicles

Jason R. Tuvel — Wed, 30 Mar 2011 12:16:30 -0500

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.

]]>The questions that arise with nearly all new legislation are: (1) when will the law go into effect and (2) who will be required to adhere to the newly promulgated rules and regulations. The Bill as written will contain a four month grace period after its enactment. Therefore, a shopping center constructed prior to the expiration of the grace period will not be obligated to comply with the Bill. The Bill also exempts developers who have filed a site plan application with the applicable municipality prior to the expiration of the grace period. Developers should be aware that the site plan application need only be filed, not approved prior to the expiration of the grace period.

Non-compliance with the Bill will result in penalties to a shopping center owner in an amount of $500 for the first offense and $1000 for all subsequent offenses. The enforcing agency is intended at this time to be the New Jersey Division of Taxation who will have the power to file an action for injunction in the Superior Court to restrain the operations of a shopping center in the event the shopping center owner habitually violates the provisions of the Bill.

The Bill will require developers to evaluate the cost of such “electric vehicle charging stations,” which are defined as an “electric recharging point complete with electric vehicle supply equipment that is capable of providing level 2 charging for plug-in electric motor vehicles,” in connection with their overall budgets for their project. Level 2 equipment which provides charging through a 240 V, AC plug, can take 3 to 8 hours to reach a full charge, adding about 25 miles of range per hour of charging time, depending on the vehicle. Moreover, municipalities, professional planners and land use attorneys may be faced with the issue of whether the Bill impacts municipal parking ordinances and how they are interpreted by local land use boards. For example, if five (5%) of a shopping center’s parking area must be dedicated to EVs, it is conceivable that a municipality may require a developer to provide additional parking spaces for non-electric vehicles to compensate for the lost spaces.

Some other issues that may arise from the Bill are as follows:

Developers will need to account for the charging stations in overall square footage of the property in terms of what can be utilized for retail space versus parking and ancillary uses/structures.
Traffic experts may have to opine before local land use boards with respect to the impact the charging stations will have on trip generation at the property as vehicles that may not have entered the shopping center in the ordinary course may now enter the site for the purpose of charging their vehicle.
The definition of “shopping center development” is fairly vague and simply states that the property be a commercial development with a building or series of buildings with 100 or more parking spaces. Depending on the definition of “commercial development” within a municipality’s zoning ordinance, an argument could be made that the Bill applies to more than just the ordinary retail shopping center, but also to office and/or other commercial developments that normally would not be categorized as a shopping center.

After introduction of the Bill by Senator Linda R. Greenstein (D) of New Jersey Legislative District 14 on March 21, 2011, the Bill was referred to the Senate Environment and Energy Committee. It will be interesting to see if the Bill will move forward as proposed, require amendments, or lack the requisite votes to be passed into law. However, it does seem to be part of a growing “green” trend. Google recently added the location of EV charging stations to its maps and is testing wireless charging stations at its own headquarters in California. The Department of Energy has created a data center on the locations for alternative fuels, including charging stations to serve the plug-in community.

* Photo courtesy of Paul Martin Eldridge - freedigitalphotos.net.

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

New Jersey Department of Environmental Protection Proposes Waiver Rule for Economic Growth

Susanne Peticolas — Wed, 09 Mar 2011 15:00:05 -0500

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.

]]>The proposed rule would allow a waiver application in the following circumstances:

Two or more department rules conflict, or a department rule conflicts with the rule of another State agency or a Federal agency in a way that makes compliance with both impossible or impracticable.
Strict compliance with the rule will be unduly burdensome because it imposes actual, exceptional hardship or excessive cost in relation to an alternative measure of compliance that achieves comparable or greater benefits.
A waiver could result in a net environmental benefit, for example, using innovative technology or nontraditional methods or materials.
When there is a public emergency declared by a Federal or State official, and waiver would best ensure protection of the public health, safety and welfare, and the environment.

The waiver is not intended to be routine or usual. Moreover, it cannot be inconsistent with NJDEP’s core mission of protecting the State’s natural resources, human health, safety and the environment. Certain rules are not eligible for a waiver under the proposed rule including those implementing certain Federal programs, the air emissions trading program, human health protection standards, endangered species designations, remediation funding sources, licensing or registration requirements, public notice requirements, and department fees or costs.

NJDEP Commissioner Bob Martin praised the proposed rule, stating:

This is an important tool that will benefit the environment and the State’s economy….One size doesn’t always fit all in government. This offers a practical flexibility in allowing us to deal with issues.

NJDEP is accepting comments to the proposed rule through May 6, 2011.

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

NJ Senate Considering Whether to Limit Power of DEP, DCA Commissioners

Jennifer P. Smith — Tue, 01 Mar 2011 16:54:04 -0500

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.

]]>If the Senate adopts an identical version of A 2722 (S 2666) and the Governor signs it into law, the report and recommendation of the ALJ would be final, without further review by the department head, in any contested case from:

the Department of Community Affairs;
the Department of Education;
the Department of Environmental Protection;
the Department of Children and Families involving placement on a child abuse registry;
the Department of Health and Senior Services involving placement on the nurse aid registry, and penalty matters;
the Division of Family Development in the Department of Human Services;
the Division of Civil Rights in the Department of Law and Public Safety;
the New Jersey Motor Vehicle Commission;
the Civil Service Commission; and
the Department of Law and Public Safety under P.L.1988, c.123 (C.56:12-29 et seq.).

Notably, the Division of Alcoholic Beverage Control and the Department of Transportation are not on the targeted list. Therefore, the Director of the Division of Alcoholic Beverage Control and the Commissioner of the DOT will continue to have the final say in contested cases with their departments. In addition, the bill does not impact a party’s right to appeal the ALJ’s decision to the Appellate Division.

Although the bill is intended to cut red tape and lessen the time between the ALJ’s decision and when the final order becomes appealable, it also eliminates a check on the OAL by the head of the department, who presumably is an expert in the field.

The bill was received in the Senate (S 2666) and referred to the Senate State Government, Wagering, Tourism & Historic Preservation Committee. A vote on the bill has not yet been scheduled.

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

USEPA Soliciting Comments on Guidance for Institutional Controls

Gibbons P.C. — Mon, 20 Dec 2010 09:07:26 -0500

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.

]]>EPA is collecting comments on this guidance document. Comments must be received on or before January 14, 2011. Regardless of whether you plan to comment, environmental practitioners who advise clients on redevelopment and clean-up issues should be aware of EPA’s guidance on these issues.