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

In our electronic age, New Jersey’s antiquated laws governing document recordation were in serious need of some updates. A new law was recently passed modernizing the New Jersey Statutes by requiring the acceptance of electronic alternatives to paper documents, in addition to paper documents. In addition, provisions of the statute, disbursed over various sections that logically belonged together, have been compiled in a more concise and coherent fashion, and antiquated language and procedures have been removed. The revisions clearly result in a much more reader- friendly version of the law relating to title recordation in New Jersey.

Assembly Bill A-2565 P.L.2011, c.217 revising the New Jersey statutes pertaining to the recording of title documents was signed into law by Governor Christie on January 17, 2012. The New Jersey Law Revision Commission (NJLRC) approved this revision project following the enactment of the federal Electronic Signatures in Global and National Commerce Act (E-sign), and New Jersey’s enactment of the Uniform Electronic Transactions Act (UETA). The legislative statements (Statements) issued by the Senate Community and Urban Affairs Committee (Senate) and Housing and Local Government Committee (Assembly) related to A-2565 note that “while the use of electronic deeds and mortgages is not expected to occur in the near term, both E-sign and UETA encourage the development of systems that will accept electronic documents without disrupting the ongoing process of title recordation.”

Title 46, chapters 15 to 26 of the New Jersey statutes currently govern the recording and indexing of title documents. Most of these statutes were written when recording meant storing and including paper documents in large books. Amendments then allowed recording offices to microfilm documents and later permitted the use of any other method of recording that was “in conformance with rules, standards and procedures promulgated by the Division of Archives and Records Management (Division) in the Department of State (Department) and approved by the State Records Committee pursuant to its authority under section 6 of P.L.1994, c.140 (C.47:1-12) and the “Destruction of Public Records Law.” The recording system is intended to be fluid, preventing its extinction, by allowing for the approval of new methods of recording documents as recording technology advances. However, as the Senate and the Assembly note, with an increase in the use of new recording methods, comes an increase in the need for regulatory authority to assure uniformity.

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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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On January 17, 2012, Governor Chris Christie signed into law a bill allowing out-of-state winemakers to sell directly to New Jersey consumers and retailers. The bill was in response to the Third Court’s decision in Freeman v. Corzine, which we reviewed on this blog a year ago. The decision invalidated a New Jersey law allowing certain New Jersey farmers and wineries to skip wholesalers and sell directly to retailers and consumers. The Court determined that the law ran afoul of the Constitution’s Dormant Commerce Clause because it imposed restrictions benefiting in-state wineries and farmers at the expense of their out-of-state competitors. This new law is intended to balance the competing rights of in-state and out-of-state wineries.

The Third Circuit ordered the case remanded to the District Court to remedy the constitutional violation. In short, the District Court was being asked to choose between (1) extending the same in-state privileges to out-of-state wineries and farms, or (2) nullifying the privileges enjoyed by in-state wineries and farms. Rather than leaving the matter with the courts, state legislators introduced several competing bills aimed at resolving the violation. On July 25, 2011, at the request of all parties, the District Court ordered the case “administratively terminated” through March 2012 in anticipation of a legislative resolution.

After months of back and forth negotiations, the new law finally garnered enough votes to pass on the final day of the 2010-2011 legislative session. The law is a compromise measure that will resolve the constitutional issues identified in Freeman v. Corzine and protect New Jersey wine growers’ right to sell directly to consumers. As a result, the District Court litigation has been rendered moot.

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The all electric Nissan Leaf is now available in seven new states, bringing the total to 30, including New Jersey, where it is sold. The additional states are Delaware, Indiana, Louisiana, Nevada, Ohio, Pennsylvania and Rhode Island. This is good news for Delaware, Pennsylvania and Rhode Island, which are members of the Transportation and Climate Initiative planning for an Electric Vehicle (EV) Network across the Northeast.

The proposed EV Network is intended to enable EV drivers to be able to use their vehicles easily throughout the Northeast from northern New England to Washington, D.C. In addition, it hopes to attract private investment with consistent standards and regulations across the region. The project will develop a plan and guidance documents for the development of a network of charging stations.

On September 22, 2011, the Transportation and Climate Initiative, which includes New Jersey as a member, was awarded a federal grant of nearly $1 million to start planning the EV Network. According to Commissioner Martin, "Improving air quality in New Jersey is a top priority of the Christie Administration. But in addition to helping us reduce auto emissions and improving the health of our residents, this new network will provide an economic boost to the State through the creation of new green jobs in research and production of electric cars and electric vehicle infrastructure."

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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.

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On October 20, 2011, New Jersey Department of Environmental Protection Commissioner Bob Martin announced that New Jersey signed an agreement with other states and the District of Columbia to develop a Northeast Electric Vehicle Network and promote alternative transportation fuels. This announcement comes less than one month after New Jersey, along with the other members of the Transportation and Climate Initiative, received a federal grant of nearly $1 million to start planning a network of charging stations for electric vehicles (EVs). The goal of the Network is to bolster economic growth, maintain the region’s leadership in the clean energy economy and reduce the area’s dependence on oil and its emissions of greenhouse gases and other pollutants.

The Electric Vehicle Network is intended to enable EV drivers to be able to use their vehicles easily throughout the Northeast from northern New England to Washington, D.C. In addition, it hopes to attract private investment with consistent standards and regulations across the region. The project will develop a plan and guidance documents for the development of a network of charging stations. It is anticipated that EVs will reduce emissions from the transportation sector by shifting vehicles from petroleum to cleaner, more efficient electricity produced by renewable resources. In New Jersey, nearly 40% of the state’s greenhouse gas emissions come from the transportation sector.

In announcing New Jersey’s membership in the agreement, Commissioner Martin stated,

The Christie Administration is committed to improving New Jersey's air quality. Diversifying the types of vehicles that people in the Northeast and Mid-Atlantic drive to include more electric, hybrid and alternate-fuel vehicles is a very important part of improving our air quality. The Northeast Electric Vehicle Network will provide the planning needed to develop and spur the construction of infrastructure that will drive market demand for these vehicles. At the same time, this effort will lead to job creation and economic growth.

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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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Today New Jersey Department of Environmental Protection Commissioner Bob Martin announced that New Jersey, along with the other members of the Transportation and Climate Initiative, have received a federal grant of nearly $1 million to start planning a network of charging stations for electric vehicles. The initiative is expected to spur job creation and the use of electric vehicles (EVs).

The grant was awarded by the U.S. Department of Energy to the Transportation and Climate Initiative which is comprised of 11 states in the Northeast and the District of Columbia. The Initiative was launched in June 2010 with the goal of reducing greenhouse gases in the transportation sector and helping build a clean energy economy. In New Jersey, nearly 40% of the state’s greenhouse gas emissions come from the transportation sector.

The proposed Electric Vehicle Network is intended to enable EV drivers to be able to use their vehicles easily throughout the Northeast from northern New England to Washington, D.C. In addition, it hopes to attract private investment with consistent standards and regulations across the region. The project will develop a plan and guidance documents for the development of a network of charging stations.

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On August 16, 2011, the United States Environmental Protection Agency (USEPA) issued its final rule on chemical reporting which will apply to the next reporting period running from February 1, 2012 through June 30, 2012. Adopted pursuant to section 8(a) of the Toxic Substances Control Act (TSCA), the rule increases the type and amount of information USEPA will collect on commercial chemicals from chemical manufacturers, including importers, allowing USEPA to better identify and publish information on the manufacturing, processing, and use of commercial chemical substances and mixtures on the TSCA Chemical Substance Inventory (TSCA Inventory).

The new rule, referred to as the Chemical Data Reporting Rule (CDR), amends and renames the existing Inventory Update Rule. The rule requires more frequent reporting of critical information on chemicals and requires the submission of new and updated information relating to potential chemical exposures, current production volume, manufacturing site-related data, and processing and use-related data for a larger number of chemicals. Instead of reporting every five years, the reporting period returns to a four year cycle.

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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 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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Thanks to a special “extension statute” enacted in 2001, the statute of limitations that requires the State of New Jersey to commence a civil action within ten years of its accrual does not apply to an action for natural resource damages (NRDs) that is brought “pursuant to the State’s environmental laws.” The Appellate Division recently held that the Legislature intended “the State’s environmental laws” to include the common law -- or at least the common law of strict liability -- and revived a claim that otherwise would have been time-barred.

The State’s Department of Environmental Protection (DEP) filed two complaints against Exxon Mobil Corporation in August 2004, seeking natural resource damages for discharges of pollutants at sites in Linden and Bayonne under the Spill Act and common-law theories of nuisance and trespass. DEP later amended its complaints to add counts sounding in strict liability.

When the trial court dismissed the nuisance and trespass claims, finding that they were time-barred because the extension statute did not apply to such common-law claims, DEP did not appeal that ruling. But when the trial court reached the same conclusion about the common law strict liability claim, DEP filed an interlocutory appeal, which the Appellate Division agreed to hear. Reversing the trial court, the appellate court held that the extension statute did apply, such that DEP’s strict liability claim was not time-barred.

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In February and May of 2011, the New Jersey legislature induced identical bills in the Senate (S 2722) and Assembly (A3915) to ban the manufacture and sale of products containing decabromodiphenyl ether (decaBDE). DecaBDEs are used in plastics for TV cabinets, consumer electronics, wire insulation, back coatings for draperies and upholstery. Growing concerns over the connection between decaBDEs and liver, thyroid and neurodevelopmental toxicity have lead a number of states, countries, as well as the European Union to institute bans.

Under the proposed legislation, the ban would go into effect on January 1, 2014, and apply to products containing more than 0.1% decaBDE, unless it is used for military or transportation purposes or is solely derived from recycled materials and used exclusively in electronic equipment. Sellers would have up to December 31, 2014 to sell off existing stock. Violations of the act would be an unlawful practice under the NJ Consumer Fraud Act, N.J.S.A 56:8-1 et seq., carrying a penalty of $10,000 for the first offense and up to $20,000 for subsequent violations.

Washington was the first state to implement a ban on decaBDE products, joined by several others, including Oregon, Maine, Vermont and Maryland. In addition, in December 2009, EPA negotiated phaseout commitments from three companies responsible for most of the decaDBEs sold or imported into the United States who agreed to end all uses of the chemical by December 2013.

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Encouraging development of environmentally challenged real estate -- brownfields -- is usually the task of state agencies. In New Jersey the Office of Smart Growth; the Economic Development Authority and the Department of Environmental Protection all offer programs intended to encourage redevelopment of brownfields. However, states are struggling to fund and support their brownfield programs and funds for outreach to potential developers and their allied professionals are in short supply.

As a result USEPA’s recent “Federal Programs Guide” is a welcome reminder of the federal resources that may be available to assist brownfield redevelopment projects. This comprehensive guidebook provides an agency-by-agency survey of brownfield-related initiatives. EPA’s guidebook also presents a valuable primer on tax credits and favorable tax treatment for brownfield remediation.

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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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The Eighth Circuit recently addressed an issue which the United States Supreme Court expressly side-stepped in 2007 when it decided United States v. Atlantic Research Corp., 551 U.S. 128 (2007). In Atlantic Research, the Court left open the question whether potentially responsible parties that incur response costs pursuant to an administrative consent order or a judicially approved consent decree may pursue a cost recovery claim under §107 of CERCLA, §113 of CERCLA or both sections.

In Atlantic Research, the Supreme Court held that ARC, a private party that had incurred response costs, could bring suit under §107 of CERCLA because it had “voluntarily” incurred response costs to remediate its property. It also recognized that the costs of reimbursement paid pursuant to a legal judgment or settlement are recoverable only under §113(f) of CERCLA. The Court refused to classify other response costs that did not fit either of these categories, declining to decide whether response costs incurred pursuant to a consent decree could be recovered under §107, §113(f) or both sections of CERCLA.

This issue left open by the U. S. Supreme Court in 2007 was recently ruled upon by the Eight Circuit in Morrison Enterprises, LLC v. Dravo Corporation, No. 10-1468 (April 5, 2011, 8th Cir.). Morrison and the City of Hastings, Nebraska sued Dravo Corporation under §107 of CERCLA to recover response costs that they had incurred responding to contaminated groundwater at the Site. In 1991 and again in 1996, Morrison had entered into Administrative Orders on Consent with EPA to operate a groundwater extraction and treatment system, which began operating in 1997. Morrison also entered into a consent decree regarding the operation of the groundwater extraction and treatment system.

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The New Jersey Department of Environmental Protection (“NJDEP”) launched a new e-permitting program that will allow the public to apply on-line for certain coastal permits. The program is consistent with 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 program will compliment NJDEP’s existing on-line permit application systems for its air, water and underground storage tank cleanup programs. Property owners may now apply for two types of general permits on-line: a GP-14 permit for in-kind bulkhead replacements and a GP-19 permit for dock replacements in artificially constructed lagoons. The process simply requires the applicant to answer a short list of questions and to certify to the truthfulness of those answers. Based on the applicant’s responses, the program will approve or reject the permit.

The new program is expected to vastly streamline the existing permit process, which currently may take up to three months for a response. Automating the permit process also frees up valuable NJDEP resources.

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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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Susanne Peticolas, a Director in the Gibbons Real Property & Environmental Department, was the Dinner Speaker at the April meeting of the Institute for Supply Management - New Jersey, Inc. on April 13, 2011. She addressed the issue of greenwashing, unjustifiable product claims of being environmentally sensitive and strategies to help companies avoid the problem.

Ms. Peticolas explained that sustainability has become an increasingly important corporate aspiration in the face of global warming concerns and the U.S. commitment to reduce greenhouse gases under the Copenhagen Accords. Among common corporate sustainability practices is buying “green” products from “green” vendors. Although there are some third party independent verification systems, such as Energy Star, Forest Stewardship Council, and LEED, much of the green marketplace operates on a caveat emptor basis. The proposed Green Guides published by the Federal Trade Commission in October 2010, offer guidance on what kind of eco-friendly claims are appropriate. The Guides are a useful tool, backed by the FTC’s enforcement powers, and provide some check on the marketplace, but cannot substitute for a savvy and informed purchasing manager.

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The Audit Committee of the New Jersey Department of Environmental Protection’s Site Remediation Professional Licensing Board is soliciting comments on its draft process and questionnaire for the completion of statutorily required audits of the work of Licensed Site Remediation Professionals (LSRPs). The Committee is accepting comments until April 18, 2011. The Board intends to finalize the process and questionnaire at its May 2, 2011 meeting.

The New Jersey Site Remediation Reform Act created the Board to oversee the work of LSRPs. Under the statute, each year the Board must audit the submissions and conduct of at least 10% of all LSRPs. The audits will serve as a first step for gathering information on LSRP submissions and on their compliance with the statute’s code of conduct for LSRPs. The draft process and questionnaire can be found on the Board’s website.

Comments should be submitted by 5:00 p.m. on April 18, 2011 via e-mail to karen.hershey@dep.state.nj.us or via mail to:

Site Remediation Professional Licensing Board
c/o New Jersey Department of Environmental Protection/Site Remediation Program
Office of Assistant Commissioner
PO Box 420; Mailcode 401-06
401 East State Street
Trenton, New Jersey 08625-0420
Attn: Audit Committee

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

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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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On May 18, 2011, the New Jersey Appellate Division upheld a trial court’s decision that the New Jersey Department of Environmental Protection had failed to establish sufficient “nexus” or connection between the operator of a dry cleaner and regional groundwater contamination. In New Jersey Department of Environmental Protection v. Dimant, et al., (Docket A-3180-09T2), the Appellate Division soundly rejected New Jersey’s claim that “the Spill Act must be interpreted and applied very broadly to find that any discharge at any time, even a de minimis one, imposes liability on all operators handling that product, and that a direct causal connection between the discharge and the damages need not be established.” This sort of argument which asks the court to overlook critical connections is all too common in environmental cases. Indeed, governmental plaintiffs often invoke policy reasons when asking for relaxed nexus requirements whereas private parties seeking contribution frequently call on the courts to shift the burden to the alleged dischargers.

However, in Dimant the Appellate Division reminded all potential plaintiffs seeking to impose liability for clean-up costs on former owners or operators that they must meet their burden by coming forward with a preponderance of the evidence sufficient to prove a “nexus” between the defendant and the discharge as well as connecting the damages to the contamination. Although plaintiffs may resort to circumstantial evidence and experts, any break in the chain of connections between a defendant and the discharge or the discharge and the alleged contamination (or the contamination and the plaintiff’s damages) should be fatal after Dimant.

Dimant involved the dry cleaning solvent perchloroethylene (PCE) which had impacted over 350 acres of groundwater in and around Bound Brook. Although there were no less than three dry cleaners in the neighborhood (each of which had several owners and operators), as well as two or three other possible sources of PCE, NJDEP’s investigations eventually focused on only one relatively short term operator of one of the dry cleaners. Using a combination of inspection reports that confirmed the presence of discharge pipes in and around dry cleaning operations, and sampling data, NJDEP’s expert concluded that one particular operator was the “primary source” of the groundwater contamination. However, the trial court took a critical look at the alleged connections between this dry cleaner’s operations and the PCE discharge as well as the nexus between any potential discharge and the probability that it caused such extensive contamination. After a non-jury trial, the court found that NJDEP failed to prove its case primarily because its expert failed to address the presence of older, weathered PCE which pre-dated defendant’s activities. NJDEP’s expert was further faulted for the failure to consider other possible sources of the PCE. Indeed, reading between the lines it appears that NJDEP probably cobbled together sufficient evidence to prove that defendant’s operations resulted in minor discharges into a paved parking area. However, it also appears that NJDEP utterly failed to establish that defendant’s discharge was of sufficient volume or duration to have permeated the pavement and entered the groundwater and then caused the contamination. Thus, the chain of connections between the dry cleaning operations and the contaminated groundwater was broken.

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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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The deadline to file real estate tax appeals in New Jersey to challenge the assessment of real property is April 1 (or 45 days from the bulk mailing of assessment notices, whichever is later). Given widespread declines in market values in recent years, there may be an opportunity for property owners — particularly owners of multifamily, commercial and industrial property — to reduce their assessments, and hence their property taxes, by filing a tax appeal.

A tax appeal may be advantageous not only because of the opportunity to achieve a reduction in the property’s assessment for the present year, determined based on the property’s value as of the preceding October 1, but under the Freeze Act, the new assessment cannot be changed for the next two years. Therefore, the savings arising from a successful tax appeal can be substantial assuming the tax rate remains relatively constant. However, there is also some risk in that if during the appeals process the current assessment is determined to be below the acceptable range, the assessment can be increased.

Note also that if this is the first tax year following implementation of a municipal-wide revaluation or reassessment, the deadline for filing a tax appeal is May 1.

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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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Recently, this past December, the New Jersey Division of Taxation posted expanded Frequently Asked Questions and responses regarding the Bulk Sales Act, NJSA 54:50-38. Given the breadth of the Act, which was expanded a couple of years ago to cover transactions in which any seller makes a bulk sale, not just sellers who collect and remit sales tax, a review of these new FAQs is advisable.

Our previous post on the Bulk Sales Act outlined some of its operative provisions. Additionally, for a detailed analysis of the Act, see the article in the New Jersey Law Journal authored by Peter Ulrich and Russell Bershad, “Broad View of the Expansion of the Tax Bulk Sales Notification Requirements.”

When in Doubt, File

The expanded FAQs and responses don’t carry the weight of law but they are interesting and in some cases surprising. They reflect the position that the Division will be taking on many bulk sales issues. The message running throughout is clear: when in doubt, file.

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On January 13, 2011, the New Jersey Department of Environmental Protection’s Site Remediation Program will release new and updated forms for use by those conducting site investigations and cleanups. The forms -- which already number in the dozens -- must be used when information is submitted to the Program, and were developed pursuant to the requirements of the Site Remediation Reform Act. Interested parties will be able to see the new and updated forms by visiting a dedicated webpage, scrolling down or clicking on “Current Forms,” and noting the version and date for each form.

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

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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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The New Jersey Department of Environmental Protection is seeking input from all interested stakeholders as it develops proposed revisions to three separate sets of regulations that govern site cleanups: the Administrative Requirements for the Remediation of Contaminated Sites (“ARRCS”) rules,which were drafted to implement the Site Remediation Reform Act; the regulations covering cleanups under the Industrial Site Recovery Act (“ISRA”); and the rules for cleanups involving underground storage tanks. NJDEP’s call for public input represents an unusual opportunity to affect the agency’s plans as the proposals are being drafted. Three members of the Gibbons Environmental Team have already published a detailed analysis of important issues raised by NJDEP’s working drafts.

The stakeholder process is designed to incorporate the views and concerns of important segments of the public into the redesign of the regulations to make them consistent with the SRRA-created Licensed Site Remedial Professional (“LSRP”) program by the statutory deadline of May 2012. NJDEP anticipates publishing a formal proposal for revising the regulations in May 2011.

A dedicated page on NJDEP’s website includes links to working drafts of the revisions, as well as instructions on how to submit comments. Comments must be submitted by January 14, 2011 in an e-mail to SRRA@dep.state.nj.us with a subject line that reads “Stakeholder Input.”

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

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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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On Monday December 6, 2010, New Jersey’s first black bear hunt in five years opened. It lasted for six days, coinciding with the annual deer hunt. An attempt to enjoin the hunt filed by Animal Protection League of New Jersey, the Bear Education and Resource Group and two individuals was rejected on Friday by the New Jersey Appellate Division in a per curiam decision that found that the appellants failed to meet the legal requisites for a stay. An emergent application to the New Jersey Supreme Court on Saturday also was unsuccessful.

The New Jersey Department of Environmental Protection (“NJDEP”) estimates that the black bear population in northern New Jersey is around 3,400. The hunt was expected to reduce the population by 250-700 animals. On the first day of the hunt, 264 bears were taken, the largest one-day tally in the hunt’s history. By the end of the hunt, 589 bears had been harvested.

NJDEP determined that a controlled hunt was a necessary component of its Comprehensive Black Bear Management Policy, which was developed to manage the bear population and reduce bear-human conflict. According to the Division of Fish and Wildlife, between January 1 and July 20, 2010, bears have been responsible for one attack on a person, three unprovoked attacks on dogs, 26 livestock kills, 23 attempted home entries, 27 successful home entries, 3 vehicle entries, 74 vehicle strikes, 13 aggressive behavior incidents, 526 nuisance incidents and 301 garbage raids, as well as 548 sightings. In addition to a controlled hunt, the Policy incorporates education, the continuation of ongoing research and population monitoring, appropriate non-lethal control measures, and investigation of all viable population control methods.

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This is the second of two articles about counseling clients in acquiring distressed commercial mortgage loans. In the first blog post we discussed due diligence regarding the loan documents and loan collateral. This post addresses due diligence on the borrower and any guarantors, and due diligence regarding the status of the loan being acquired. As noted in Part One, due diligence for acquiring distressed mortgage debt takes place under tight time constraints, without the cooperation or participation of the property owner, with no opportunity to interview tenants or, in many cases, to inspect the property itself. You will basically be reviewing files that are sometimes incomplete and often contain outdated information. Nevertheless, there will be information of value in the files to be reviewed with a discriminating eye.

A. The Borrower and Guarantors

Questions regarding the borrower and any guarantors really go to the likelihood of the loan being repaid, with or without entering into a workout agreement.

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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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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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There is no shortage of buyers anxious to buy distressed mortgages. The simple reason is the possibility of substantial profit if a loan can be purchased at a significant discount and there is a realistic possibility that the borrower or, if it forecloses, the lender, will be able to salvage the property. This is the first of two articles about counseling clients in acquiring distressed commercial mortgage loans. Bankruptcy, special assets such as condominium properties and UCC foreclosures are beyond the scope of these articles.

Lenders and purchasers come together through a variety of avenues, but common to all is the need for the purchaser to conduct due diligence on the asset that the lender proposes to sell. Some lenders require due diligence to be completed before bids are received from prospective purchasers, others require due diligence to proceed under a letter of intent or similar stage of the process and still others will allow due diligence to be undertaken after a purchase agreement has been signed, which agreement will typically be contingent on the purchaser being satisfied with its due diligence.

Common to almost all deals is the lender’s insistence that due diligence
be completed in a very short time period.

Due diligence for acquiring distressed mortgage debt is much like the due diligence a lender would conduct in deciding to make a loan in the first instance, except the loan file is or should be complete rather than being assembled as in the case of a original loan. Unlike your role in closing a loan, where you assuring, to the greatest extent possible, that all issues are resolved before the loan can be closed, in this case you are issue-spotting.

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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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How can the New Jersey Department of Environmental Protection (NJDEP) be improved? The agency released two different perspectives on that question over the past few weeks: a “top-down” view in the form of a “Transformation Plan” for reforming NJDEP, and a “bottom-up” view in the form of a compilation of hundreds of complaints and suggestions from NJDEP employees.

The NJDEP Transformation Plan released on October 7 announces the agency’s commitment to “making fundamental changes in how we function and in how we think about what we do daily.” Drawing on NJDEP’s new Vision Statement and a set of agency-wide priorities established by Commissioner Bob Martin, the Transformation Plan sets forth an ambitious program for changing both how NJDEP does its job -- changing its “business processes,” in the words of the plan -- and the substance of its policies. Underlying all three documents is a belief that environmental protection and economic growth can and must go hand in hand. Indeed, among the four “mission critical” priorities for NJDEP, the Transformation Plan lists “[s]upporting economic development of the State’s economy.”

Less sweeping in its verbiage but equally revealing about the agency is a set of over 700 complaints and suggestions from NJDEP employees released on October 14. The compilation, arranged by program area, ranges from the mundane (problems with telephones) to the far-reaching (frustration with enforcement policies). The survey provides an interesting glimpse into the internal workings of NJDEP at the staff level, where any agency-wide transformation would have to take root. The administration’s decision to make the compilation public may be an effort to show the public that support for changing NJDEP is not limited to management or political appointees but is shared by the rank and file.

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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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The time period to renew an expired New Jersey alcoholic beverage license is rapidly coming to a close and will end on November 8, 2010. Under a provision of the Alcoholic Beverage Control Act, N.J.S.A. 33:1-1 et seq., enacted earlier this year, a person holding an expired license, which was not renewed within the five years prior to May 6, 2010, may file for renewal of that license provided that (i) the applicant pay all renewal fees for the years in which timely renewals were not filed, and (ii) the applicant’s failure to apply for a renewal during that period was due to circumstances beyond his control or due to other extraordinary circumstances.

Prior to the passage of this provision, an applicant holding an expired license could file for a renewal only for one year following the expiration of the license renewal period for the license. The provision in question, P.L. 2010, c. 14, § 1, is codified at N.J.S.A. 33:1-12.18.

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

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It is difficult for a defendant to avoid a claim by invoking the doctrine of waiver, which requires proof of a clear, unequivocal act showing that the plaintiff deliberately intended to relinquish a known legal right. It is doubly difficult when the plaintiff is the State of New Jersey, against which the application of the doctrine is, in the words of a leading Supreme Court case, to be “most strictly limited.” But thanks to not just one, but two documents clearly showing such an intent -- including one from the deputy attorney general on the case -- a federal district judge recently held that the State had waived its right to seek natural resource damages at a site in Franklin Township.

 It Never Hurts to Ask

In New Jersey Department of Environmental Protection v. FMC Corporation, Civ. No. 01-0476 (D.N.J. Sept. 29,. 2010), District Judge Dennis M. Cavanaugh granted summary judgment in favor of FMC Corporation on a claim for natural resource damages (NRDs) asserted by the New Jersey Department of Environmental Protection (NJDEP) and the Administrator of the State’s Spill Compensation Fund. The site in question has been the subject of investigations, cleanup, lawsuits, and settlement negotiations going back to the 1980s. During one set of those settlement negotiations, FMC, which had already spent more than $6 million in cleanup costs, contacted the Attorney General’s office in an attempt to determine the full extent of its potential exposure at the site. The news from the State’s lawyers was good: according to a memorandum from the assessment coordinator at NJDEP’s Office of Natural Resource Restoration, NJDEP would not assess injuries to natural resources at the site because groundwater contamination did not extend beyond the site’s boundaries, and NJDEP policy then in effect was to exclude such groundwater contamination from NRD assessments.

As settlement negotiations continued, FMC in 2003 sought more information from the Attorney General’s office, including a copy of the NJDEP memorandum. In reply, the deputy attorney general provided the memorandum, which she described as “explaining why no natural resource damages are being assessed at this site. In the meantime, a new administration had taken office at the beginning of 2003. Under the new McGreevey administration, NJDEP policy changed, such that on-site groundwater contamination was no longer excluded from NRD assessments, at least in the context of settlement negotiations. That new policy was later memorialized in a September 2003 policy directive.

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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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As discussed in a recent post, beaches have a way of generating difficult cases about when land-use regulations result in a compensable “taking” of property. A new opinion from the New Jersey Supreme Court reminds us that things can be just as complicated when the government takes beachfront property the old-fashioned way, via eminent domain. In City of Long Branch v. Liu, the Court held that the condemning municipality did not have to compensate the owner for land that was created by a government-funded beach replenishment project and appeared to expand the original parcel.

An Eminent Domain Case -- With a Twist

Under a redevelopment plan adopted in 1996, Long Branch sought to acquire an oceanfront parcel owned by Jui Yung Liu and Elizabeth Liu. The parties could not agree on a price, so in 2001 the city filed a complaint to take the property via eminent domain. The complaint used a property description from the Lius’ 1977 deed, which noted that the property extended to the mean high water mark.

So far, it’s a routine eminent domain action. But the Lius’ property -- or at least what they thought was their property -- had changed quite a bit in the intervening years. In the 1990s, the federal, state, and local governments had conducted a multi-million dollar beach replenishment program to protect shore communities. For two weeks, the Army Corps of Engineers dumped sand along the shoreline where the Luis’ property faced the Atlantic Ocean. As a result, dry sand now extended an additional 225 feet seaward of the mean high water mark described in the 1977 deed. In all, the project created more than two acres of dry sand. The Luis claimed title to the new land, and moved to amend the city’s complaint. Both the trial court and the Appellate Division rejected their request, and the Supreme Court granted certification to consider whether the Lius were entitled to compensation for the land created by the beach replenishment project.

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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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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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Owners of land subject to the 2004 Highlands Water Protection and Planning Act (Highlands Act) who preserve their land under the Green Acres Program or the State Farmland Preservation Program will benefit from special appraisal rules for five more years, thanks to legislation signed into law by Governor Christie on September 9. Under the “dual appraisal” provision, which expired last year but has now been extended to 2014, landowners receive two appraisals -- one based on current property value, and one based on pre-Highlands Act zoning and other restrictions -- and the higher appraisal is used as the basis for negotiation with the State on the appropriate payment.

According to a report released in August by the Highlands Council, nearly 300,000 acres of open space and farmland in the Highlands Region, or one-third of its total area, are already preserved. Preservation will also receive a major boost beginning next year when additional funds are generated from a $400 million land preservation bond issue approved by voters last year.

Both the extension of the “dual appraisal” provision and the availability of new preservation funding should enhance Highlands land preservation efforts in the coming years. Landowners who are concerned about the effect of the Highlands Act on the value of their property may want to investigate the potential benefits of various land preservation options.

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

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Russell Bershad, Co-Chair of the Gibbons Real Property & Environmental Department, was featured as an Industry Leader in the August 25, 2010, issue of Real Estate Weekly.

Real Estate Weekly noted, “In one of the most challenging real estate environments in recent history, Bershad has expanded what is one of New Jersey's busiest regional practices.”

Real Estate Weekly, published weekly since 1954, reaches over 30,000 readers in New York, New Jersey, Connecticut, Long Island and Westchester. The publication is the key source for late-breaking news and recent developments affecting the commercial, residential and industrial markets. In addition, it publishes monthly supplements which focus on specific aspects of the real estate industry.

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

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With the advent of New Jersey’s LSRP program comes an added financial benefit for environmental remediation matters requiring a remediation funding source (“RFS”). There is an opportunity to save on the statutory annual 1% surcharge on an RFS, especially useful for those sites subject to the requirements of the Industrial Site Recovery Act.

Among the new remediation requirements in the Administrative Requirements for the Remediation of Contaminated Sites, N.J.A.C. 7:26C (“ARRCS”) is an annual remediation cost review to be submitted to the NJDEP on a Remediation Cost Review Form. N.J.A.C. 7:26C-5.10. For new sites subject to the LSRP program and for older sites that have opted-in to the LSRP program, the form must be certified by the site’s LSRP.

Based on the revised cost of the remediation developed in conjunction with the annual review (though this can also be done at other times as well), the person required to establish it, may reduce the amount of the RFS upon submission of the remediation cost review form to the NJDEP. N.J.A.C. 7:26C-5.11. So long as its certified by the LSRP, there is no need to obtain NJDEP approval of an RFS reduction. Of course, such a reduction is ultimately subject to the NJDEP’s broad rights of review of all documents and submissions. N.J.S.A. 58:10C-21. Thus, if the RFS is reduced by the LSRP, then, the 1% RFS surcharge required by 7:26C-5.9 will accordingly be reduced. In addition, to the extent the cost of the RFS itself is driven by the amount (such as with letters of credit), there will be further cost savings. For those sites subject to an ISRA Remediation Agreement with high initial remediation cost estimates that have not been reviewed recently, there may be an opportunity for a substantial cost savings.

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A Michigan court dismissed a juror who during the trial posted on Facebook, "gonna be fun to tell defendant they’re guilty." A New Jersey Appellate Court holds it is alright to google jurors’ names during jury selection. Carino v. Muenzen, App. Div. August 30, 2010. The upshot is that the internet is moving into the jury box.

In Carino, the plaintiff’s attorney used the court’s wi-fi to access the internet on his laptop. The court, ever hip, asked if he was googling the potential jurors. The trial court told him to put away the computer because he gave no notice he intended to google the jurors. The Appellate Court held it was an error, albeit a harmless one, to block the attorney from googling in the courtroom. The court noted that the trial court administrator had issued a press release announcing the wi-fi in the "Morris County Courthouse to maximize productivity for attorneys and other court users."

In an Arkansas court, a juror verdict was ultimately tossed out when it was discovered a juror tweeted during the trial that he hadn’t done much other than give away "TWELVE MILLION DOLLARS of somebody else’s money!"

Clearly, jurors, attorneys and courts are having to deal with social media and internet access in the courtroom. Courts will have to be more specific in their instructions to jurors on what "not discussing the case" means. While the Appellate Court upheld the right of the googling attorney to do so in court, it is not the best tactic. Most courts publish the array of jurors who may be available for trials in advance. See J. Klock, New Jersey Trial Practice, § 7.29 Volume 2E (West 2010) (can request general panel of jurors ten days before trial). It would be best to check on the jurors outside the court, as it is important to also look at the jurors and read their reactions to the voir dire.

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

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A bill that would add the Port District of the Port Authority of New York and New Jersey to the definition of “wind energy zones” in the newly adopted Offshore Wind Economic Development Act, was reported out of the Senate Budge and Appropriations Committee on September 13, 2010. The amendment would allow tax credits for qualified wind energy facilities in the Port District.

The Port District encompasses an area within a radius of about 25 miles of the Statue of Liberty. According to the committee statement, the bill would not affect the total amount of tax credits available for wind energy facilities. Of course, the addition of another wind energy zone could reduce the amount of tax credits available for other wind energy facilities.

There are currently three offshore wind projects underway off the coast of New Jersey.

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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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If you are a NJ-based entity, do you have a power plant in the works? Are you thinking about a Combined Heat and Power (CHP) plant? If so, the New Jersey Economic Development Authority (NJEDA) has a grant for you if you act with alacrity. October 4, 2010, at 5:00 pm is the deadline for submitting an online solicitation for the competitive CHP grants. Grants are available for $450 per kW up to a maximum of $5 million per plant. All forms are available online.

It should be noted that grants cannot exceed 50% of the project. Upgrade projects are available for funding. However, the projects cannot come online before January 1, 2011, but must begin before September 30, 2011. And of course, the projects must be located in New Jersey.

The application fee is $500 with a closing fee of 1% of the approved grant. There are other fees and there are numerous eligibility requirements which should be checked carefully.

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

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On September 2, 2010, Americans for Prosperity staged a rally in front of the Atlantic County Utilities Authority windmills to protest against offshore wind turbines as a waste of taxpayer money. Ironically, according to the ACUA, its five wind turbines save it $600,000 a year in electricity bills.

The protest comes less than one month after Governor Christie signed the Offshore Wind Economic Development Act into law. The Offshore Wind Economic Development Act establishes an offshore wind renewable energy certificate program that will require a percentage of electricity sold in NJ to come from offshore wind energy. New Jersey hopes that the new law will spur economic development and job growth in the state. 

There are currently three offshore wind projects underway off the coast of New Jersey.

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

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

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

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

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

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

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

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

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

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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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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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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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Despite the new licensing program for environmental consultants in New Jersey, they still remain open to professional tort claims without the necessity of an affidavit of merit. As required by N.J.S.A. 2A:53A-27, a plaintiff making a claim for malpractice or negligence against a “licensed person” must provide an, “affidavit of an appropriate licensed person that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice, or work that is the subject of the complaint, fell outside acceptable professional or occupational standards or treatment practices.”

Fifteen different types of “licensed persons” are subject to this requirement. N.J.S.A. 2A:53A-26. However, “licensed person” does not include “environmental consultants” broadly, though environmental engineers, licensed pursuant to N.J.S.A. 45:8-27, do fall within the definition of “licensed persons.” Those environmental consultants who are geologists by education and training and/or in the past, licensed pursuant to the requirements of the Underground Storage Tank Certification Program, N.J.S.A. 58:10A-24.1-8, are not included within the definition of “licensed person.”

In establishing Licensed Site Remediation Professionals (“LSRP”) in the Site Remediation Reform Act, N.J.S.A. 58:10C-1 et seq., the legislature did not add LSRP’s to the definition of “Licensed Person” for purposes of compliance with New Jersey’s affidavit of merit statute. Perhaps the issue is the mandate of the LSRP to, first and foremost, protect the “public health and safety and the environment,” N.J.S.A. 58:10C-16, as opposed to first serving the interest of their clients, though requiring an affidavit of merit does not appear to be inconsistent with such broad goals. In any event, LSRP’s must be aware that this new license alone does not appear to afford them the potential protections from frivolous law suits afforded by the affidavit of merit statute.

David A. Brooks is an Associate in the Gibbons Real Property and Environmental Department.

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New Jersey’s Natural Resource Damage (“NRD”) program is cobbled together from an aging policy directive issued in 2003, an Appellate Division decision, NJDEP v. Exxon Mobil Corporation, [393 N.J. Super 388 (App. Div. 2007)] and a handful of lower court rulings on various and sundry motions. There is no specific enabling statute and the agency has never adopted any formal regulations. In short, it’s the type of program which is bound to leave the regulators, the regulated community (and the lawyers who advise them) with plenty of questions. Because there are no clear rules, New Jersey’s NRD program has generated a significant amount of litigation.

A July 26, 2010 ruling issued by the Middlesex County Superior Court following a ten day trial indicates that New Jersey’s approach to NRDs might be in for some careful scrutiny. Of course, a trial court’s findings have limited value as precedent. Nevertheless, the recent ruling in NJ Dept. of Environ. Protection v. Essex Chemical can only be viewed as a disaster for the present ad hoc approach to NRDs favored by the New Jersey Department of Environmental Protection.

In this case, New Jersey’s experts were left without the presumption that usually flows from following duly promulgated rules. Without this presumption New Jersey’s experts were unable to meet their burden and the plaintiff simply failed to prove its case. This is the second time New Jersey has stumbled at the expert proof phase of an NRD case. It is especially noteworthy that the trial judge rejected a modified Resource Equivalency Analysis proposed by New Jersey’s experts. New Jersey is attempting to use this novel method in several other cases and the state may now be forced to change course.

New Jersey’s NRD program is both novel and evolving. So it is hardly surprising that when issues come before the courts, the state and its experts will have good days and bad days. They recently had a very bad day.

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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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This summer, the long shadow cast by the oil rig blow-out in the Gulf of Mexico seems to be everywhere. For example, we recently reported that EPA has written to Congress endorsing the concept of reinstating the Superfund tax which expired back in 1995. Thus, it was only a matter of time before New Jersey got into the act.

On July 15, 2010, the Senate Environment and Energy Committee in Trenton took up S-2108. If adopted in its present form this bill would raise the limit on liability pursuant to the New Jersey Spill Compensation and Control Act from $50 million to $1 billion.

It is easy to question the necessity of increasing the limit on Spill Act liability. After all, the Spill Fund is used primarily to address contamination from land based facilities. If New Jersey were to experience an event where the total damages could exceed $50 million there is already overlapping state and federal authority under CERCLA, RCRA and the Oil Pollution Act of 1990.

It remains to be seen whether this sort of legislative reaction to a long hot summer of bad news from the Gulf will resonate with the new business friendly administration in Trenton. But it is already clear that the events in the Gulf have reached Trenton.

*Photo courtesy of EPA.

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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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In less than a month, the New Jersey legislature introduced and passed S-2036, the “Offshore Wind Economic Development Act." Both the NJ Senate and the Assembly passed the Senate version on June 28, 2010. This swift action quickly followed NJ’s joining a 10-state Atlantic OffShore Wind Consortium.

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

Concerns about potential environmental impacts have been soothed by the conclusions of a two year study led by New Jersey Department of Environmental Protection and announced in draft form on June 18, 2010. The study surveyed bird species, marine mammals, sea turtles and fish off the NJ coast and assessed the likely impact from the construction, operation and decommissioning of an offshore wind farm. The final report will provide the necessary data to screen sites, estimate potential impacts on sea animals and mitigation. NJDEP Commissioner Martin noted, “We now have the science and data needed to take the first steps towards making wind energy projects a reality for New Jersey. It puts us in the forefront environmentally, while also providing New Jersey with a great economic boost from jobs that will be created by this new green industry.” The final report is expected to be released in July.

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On June 8, 2010, Governor Chris Christie joined nine East Coast state governors in signing a Memorandum of Understanding with the U.S. Department of the Interior, which creates the Atlantic Offshore Wind Energy Consortium. The consortium is intended to foster federal-state cooperation for commercial wind development on the Outer Continental Shelf off the Atlantic coast.

According to U.S. Secretary of the Interior, Ken Salazar, wind could supply 20% of the nation’s electricity needs by 2030 and create a quarter of a million jobs.

New Jersey DEP Commissioner Bob Martin stated, “It opens the door of economic opportunity, allowing us to lure companies that manufacture the components of wind turbines, creating green jobs to harness the power of nature and provide our resident with a renewable energy supply.”

In a May 1, 2010, article, Abby Gruen of the Star Ledger, reports on 3 offshore wind projects currently underway off the coast of New Jersey, including a 20 megawatt project proposed for 3 miles off the coast of N.J. She notes that there is little opposition to wind energy in NJ in contrast to Massachusetts, where local opposition threatens its first offshore project.

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

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New Jersey is pressing forward with its efforts to privatize the site remediation process. Since adoption of the Site Remediation Reform Act (SRRA) in May 2009, there has been a steady stream of new regulations, new guidance documents and revised forms. Because of these changes, practitioners must constantly check the New Jersey Department of Environmental Protection’s website.

As part of the SRRA, the Legislature directed NJDEP to develop a remedial priority system. This system will combine readily available information about site specific characteristics and contamination with public data about receptors to develop a risk index. (This process should sound familiar to anyone who has worked with EPA’s Hazard Ranking System outlined in its complex Final Rule.)

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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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On June 8, 2010, in Westport Insurance Co. v. Appleton Papers, Inc., the Wisconsin Court of Appeals for the First District held that two insurers, namely Munich Re Ag and Westport Insurance Co., are liable each for $5 million dollars to compensate Appleton Papers, Inc. (Appleton) for cleaning up the sediment contamination in the Fox River. The Fox River is undergoing a cleanup pursuant to oversight by the United States Environmental Protection Agency.

Appleton acquired assets of National Cash Register Inc. (NCR) during the l950’s and later, NCR manufactured carbonless paper using PCBs (polychlorinated biphynols). The Fox River became polluted with PCBs, a suspected carcinogenic substance. Appleton had sued nine insurers but settled with seven. The remaining two filed the appeal decided by the Wisconsin Court of Appeals in a 2 to 1 decision. Among the issues raised on appeal was whether the insurers were responsible for “after-acquired liability,” namely liability that Appleton acquired along with NCR assets after the policy periods in question expired. The insurers also asserted that Appleton had made voluntary payments not covered by the policies and that notice to the insurers was late, excusing coverage.

While the case was decided under Wisconsin state law, it bears significance to USEPA led river cleanups here in New Jersey. At present the USEPA has entered into a consent decree with 73 potentially responsible parties to conduct a remedial investigation and feasibility study of the Lower Passaic River, a seventeen mile stretch of the estuarine portion of the Passaic River. Presumably parties potentially responsible for sediment contamination in the Passaic will be scrutinizing both their old insurance policies for possible coverage and this decision for legal authority.

Passaic River, Newark, NJ. Photo courtesy of EPA.

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

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Does the NJ Bulk Sales Act Apply to Deeds in Lieu?

The Bulk Sales Act, NJSA 54:50-38, was expanded a couple years ago to cover transactions in which any seller makes a bulk sale, not just sellers who collect and remit sales tax. It provides:

• A buyer who does not comply by requesting a clearance letter and holding an escrow as directed by the Division of Taxation becomes liable for seller’s tax liability to the State, now including income taxes arising from the bulk sale itself in addition to past due taxes.
• Bulk sale means any sale, transfer or assignment, in whole or in part, of a persons business assets, not made in the ordinary course of business.
• Business assets is defined to mean realty if the primary use of the realty is to support a business on the premises.

By virtue of this expansive definition, all realty transfers other than non-rental residential real estate and inventory sales (e.g., condo units sold by a developer) are covered.

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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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On March 15, 2010, the New Jersey Assembly passed A-437, the "Time of Application" bill, by a vote of 52-15. The bill, which takes effect one year following enactment, provides that those development regulations which are in effect on the date of submission of an application for development shall govern the review of that application for development, and any decision made with regard to that application for development. A-437 now heads to the Governor's desk.

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

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A bill introduced on March 8, 2010, by Assemblyman John J. Burchizelli, and voted out of the Assembly Regulatory Oversight and Gaming Committee would prohibit all State agencies from adopting -- or even proposing -- regulatory standards tighter than those imposed by the federal government, unless such action is specifically authorized by State law. The measure, Assembly Bill No. 2486, would greatly affect environmental regulation, where federal law often sets nationally applicable requirements, but does not preempt State requirements that go beyond the federal "floor." The bill does not define the key term "specifically authorized by State law." It would not apply to regulations in effect on the date of its enactment, or to the readoption of such regulations in the future.

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

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In a rare move, an Appellate Court in New Jersey recently published a decision regarding interpretation of an access easement, setting forth a “clear intent” requirement to determine whether a third party having no interest in the subject properties, could have independent rights to use such an easement.

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

Ivette Alvarado is an Associate in the Gibbons Real Property & Environmental Department.

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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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Without changing a single standard, NJDEP may have made it easier to comply with its many surface water, groundwater, drinking water, and soil remediation standards by compiling a useful on-line compendium of selected environmental standards. Standards can change, though, so the prudent developer, consultant, or attorney will check the New Jersey Administrative Code before making any decisions.

Paul M. Hauge is an Associate in 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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Governor Christie's Department of Environmental Protection Transition Subcommittee issued its Final Report on January 15, 2010. The Report calls for significant changes in policies and practices in order to meet three overarching goals: "1) accelerate improvements to the environment, 2) remove unnecessary obstacles to economic growth and 3) more effectively manage limited fiscal and human resources." In order to meet these goals, the report recommends establishing clear department goals and performance metrics; reforming the regulatory regime to ensure legal compliance, scientific support and consideration of economic impact; streamlining the permitting process for land use; continuing advances initiated by the Site Remediation Reform Act; and establishing a comprehensive and stratgic approach toward natural resource stewardship. The report made other recommendations related to enforcement policies, regulations, promotion of "green" projects and budget and operations. Woven among a number of recommendations is a call for improvements in technology to facilitate transparency and efficiency.

The recommendations are ambitious, calling for redesigning the NJDEP in a way that will attract business investment, while improving and protecting human health and New Jersey's environment.

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

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November 3 marked the launching of the Licensed Site Remediation Professional (“LSRP”) program in earnest. On that date, all new remediation projects in New Jersey must be performed under the supervision of an LSRP, a new type of environmental professional mandated by the Site Remediation and Reform Act (“SRRA”). L. 2009, c. 60, Sections 1-29 (codified at N.J.S.A. 58:10C-1 to -29).

The complete article, as published in New Jersey Law Journal, can be viewed here.

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

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