Retail - Real Property & Environmental Law Alert

"Operation Swill": New Jersey ABC and Division of Criminal Justice Raid 29 Bars and Restaurants That Allegedly Served Cheap Alcohol as "Premium" Brands

Brett S. Theisen — Fri, 24 May 2013 15:26:32 -0500

On May 23, 2013, New Jersey’s Attorney General Jeffrey Chiesa and Division of Alcoholic Beverage Control (“ABC”) Director Michael Halfacre announced the details of “Operation Swill,” a year-long investigation involving more than 100 investigators throughout New Jersey. Operation Swill reached its climax one day earlier when ABC and Division of Criminal Justice personnel executed raids on 29 establishments throughout New Jersey suspected of substituting premium alcoholic beverage brands with “well brand spirits,” i.e., non-premium brands. N.J.A.C. § 13:2-23.19 prohibits a licensee from substituting another brand other than ordered by a customer unless agreed to by the customer. Approximately 1,000 bottles were seized during the raids, which will be held for further testing by the ABC and manufacturers.

The targeted establishments will have seven days to provide sales and invoice records that include information about the 20 brands of interest. Pursuant to N.J.A.C. § 13:2-19.11, penalties range from a 5 to 20-day suspension for each offense; thus, if further testing proves any of the seized bottles did not contain the correct labeled alcohol, that bottle could result in multiple violations based on the potential drinks that could have been poured. According to the ABC, establishments could also face a 30-day suspension pursuant to ABC regulations for any illegal activity on the licensed premise, and an additional 30-day suspension for not cooperating in the investigation.

Brett S. Theisen is an Associate in the Gibbons Financial Restructuring & Creditors' Rights Department. Mark B. Conlan, a Director in the Gibbons Financial Restructuring & Creditors' Rights Department, and Howard D. Geneslaw, a Director in the Gibbons Real Property & Environmental Department co-authored this post.

"From Ink to Occupancy" Real Estate Program at Gibbons P.C. Armed Attendees with Fundamentals & Information on the Latest Trends

Gibbons P.C. — Mon, 20 May 2013 09:58:21 -0500

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

* Pictured above (left to right): Ivette P. Alvarado, Nancy A. Lottinville, Jennifer M. Porter

Rebuilding New Jersey After Sandy - Legislation Would Require Standby Generators for a Variety of Businesses and Facilities

Howard D. Geneslaw — Mon, 17 Dec 2012 09:39:57 -0500

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

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

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

]]>A number of other pending bills apply to only specific facilities and businesses:

Grocery and convenience stores (newly constructed stores only) (A-3486 and S-2357);
Gas stations (existing and newly constructed stations) (A-3473 and S-3484, also A-3563 and S-2361);
Senior housing and/or disabled housing (newly constructed only) (A-1632 and S-402, also S-2372);
Senior residential multiple dwellings (existing and newly constructed) (A-3569);
Retirement community (existing and newly constructed) (A-3479 and S-2341);
Assisted living residences and certain other licensed residential health care facilities (existing and newly constructed) (A-2860, A-3514).

Although the circumstances which gave rise to this legislation illustrated the need for better emergency preparedness, these bills as written do not address issues concerning zoning compliance and the applicable approvals process for the installation of generators. There is no blanket exemption in any of the proposed legislation from zoning and site plan approval requirements. Therefore, those issues will have to be addressed on a site-specific basis from one municipality to another, unless the legislation is amended to establish a statewide set of uniform requirements. Some of the issues that businesses will need to consider and address are:

Is a generator a permitted accessory use in the municipal zoning ordinance, either expressly or through language allowing customary, subordinate and incidental accessory uses and structures?
Do setback requirements in the municipal zoning ordinance apply to generators?
Will impervious coverage be increased due to installation of a generator?
Does the site configuration have to be changed to accommodate siting of a generator by, for example, eliminating parking spaces or landscaped areas (which could result in the site becoming non-compliant), or does the generator's location require modifying access, circulation, loading or trash collection areas?
If the generator can be placed on the roof, will it violate height limitations, and is screening required?
If the generator can be placed within the building, is that area exempt from floor area ratio limitations and parking requirements?
Will the generator, when operational, violate municipal noise ordinances or the Noise Control Act of 1971, N.J.S.A. 13:1G-1 et seq., and its implementing regulations, N.J.A.C. 7:29-1.1 et seq.?
For existing facilities, does installation of a generator require site plan approval and the public hearing process which typically accompanies site plan review?
If a generator is required for a particular facility by state law, can a municipal planning board or zoning board of adjustment deny it based on aesthetic or other site plan considerations? And in the event of a denial, can the business be penalized for not having installed a generator?

These issues can be addressed more easily for newly constructed facilities, particularly those which have not yet secured site plan approval. But for approved facilities that have not yet obtained a construction permit, amended land use approvals may be required. And for facilities already in operation, particularly those in older buildings, those on properties which already exceed impervious coverage requirements, or those in municipalities with restrictive zoning regulations, compliance may be particularly challenging and may create deviations from local zoning requirements and the resulting need to apply for and obtain variances through costly and time-consuming public hearing proceedings.

Many of these issues appear to have been overlooked in the process of introducing legislation quickly in the aftermath of Superstorm Sandy. If you operate a business or facility which would be required to install a generator if this legislation becomes law, it would be wise to evaluate these considerations, determine how they may impact your business or facility, and consider whether to oppose the legislation or seek amendments to it through the legislative process. For answers to questions regarding your specific situation and the issues it presents, please feel free to contact an attorney in the Gibbons Real Property & Environmental Department or the Gibbons Government Affairs Department.

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

New Law Generates Buzz Among South Jersey's Wine Growers

Brett S. Theisen — Fri, 11 May 2012 15:32:59 -0500

On May 1, 2012, a law took effect that will allow New Jersey farmers and wineries to skip wholesalers and sell directly to retailers and consumers. The new law grants similar rights to out-of-state wineries and finally cleared the way for the Garden State to begin issuing new winery licenses to growers. While local business and political leaders are hoping the relaxed regulations will encourage further investment in the state’s wine industry, producers, retailers, and wine lovers alike are cheering the increased access to locally-grown wines ahead of the summer tourism season.

The new law, which we reviewed here in January, resolved the constitutional dispute at the heart of the Third Circuit’s decision in Freeman v. Corzine. That decision invalidated an earlier law, passed in 2010, that granted the same direct-to-retailer-and-consumer privileges to New Jersey growers, but at the expense of out-of-state wineries. The new licenses created by the law fall into two categories: (1) a Plenary Winery License, available for $938 and (2) a Farm Winery License (which limits production to “not more than 50,000 gallons per year”), available for between $63 and $375 depending on production volume. Both licenses allow growers that produce “not more than 250,000 gallons per year” to distribute wine directly to retailers for an additional fee. Retail shipping fees are graduated depending on the amount of wine produced each year, and range from $100 to $1,000. In addition, growers may ship up to twelve cases of wine per year, directly to any individual consumer located anywhere inside or outside New Jersey. Finally, growers may also open up to 15 “salesrooms” throughout the state for sampling on the premises and for retail sale and consumption on and off the premises. The fee for each salesroom is $250.

]]>As a result of these changes, New Jersey’s burgeoning wine industry – largely based in South Jersey – has its eyes set on developing a premier wine destination on the East Coast. At least three new wineries have been licensed in South Jersey since Governor Christie signed the bill into law in mid-January. There are now more than 50 wineries in the state, and many more are planned. Advocates hope the nascent industry will continue to create jobs and bring much-needed revenue into the state.

* Photo courtesy of dan / FreeDigitalPhotos.net.

Brett S. Theisen is an Associate in the Gibbons Financial Restructuring & Creditors' Rights Department.

New Jersey Grants Out-of-State Wineries Direct Access to Consumers & Retailers

Brett S. Theisen — Mon, 23 Jan 2012 13:43:49 -0500

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.

]]>Specifically, the new law creates a new “Out-of-State winery license,” available to applicants that do not produce more than 250,000 gallons of wine per year and are duly licensed in another state. The new license permits direct sales to New Jersey consumers, including internet sales. Out-of-State licensees will also be permitted to sell directly to consumers at up to 16 tasting-room locations in the State (compared to 15 locations for In-State wineries). Direct sales and distribution to retailers are also permitted for an additional fee. The new law will take effect on May 1, 2012.

Brett S. Theisen is an Associate in the Gibbons Financial Restructuring and Creditor's Rights Department.

Pennsylvania's Alcohol Sale Privatization Debate: What Does It Mean for Retail Beer and Wine Sellers?

Mark B. Conlan — Wed, 18 Jan 2012 14:02:27 -0500

Pennsylvania’s state-run stores could be on the verge of losing their decades-old monopoly on wine and liquor sales. On December 13, 2011, the Pennsylvania House of Representatives’ Liquor Control Committee voted 15-10 to approve an amended version of Pennsylvania House Bill 11, (“Pa. H.B. 11”), which would allow the state’s 1,200 beer retailers to sell wine to the public, in competition with the Pennsylvania Liquor Control Board’s (“PLCB”) 620 state-run stores. Notably, large supermarket chains within the state stand to gain an enormous benefit from the proposed law, which would allow for the first time in-store wine sales, as well as limited in-store tasting events. The proposed legislation now sits before the full House, awaiting floor debate, additional amendments, and a possible vote. The process could begin as early as this month.

Under the amended proposed law, a license to sell wine, called an “enhanced distributor’s license,” would be available to any “holder of a distributor license” - i.e., an entity currently selling beer in the state - after payment of a “conversion fee” of $50,000. In addition, an enhanced distributor would be required to pay an annual $15,000 renewal fee. The enhanced distributor licenses would be subject to the same population-tied cap as the current distributor licenses. Presently, the number of distribution licenses available for the retail sale of beer is limited to one license for every 3,000 inhabitants in any county, exclusive of licenses granted to certain public venues and other venues specifically identified by the Legislature.

The original version of Pa. H.B. 11 sponsored by House Majority Leader Mike Turzai and supported by Gov. Tom Corbett, would have gone even farther in breaking up the state-run monopoly. The original bill called for the complete privatization of all retail and wholesale wine and liquor sales in the state by closing and selling all state-run stores. A study commissioned by the bill’s proponents indicated that the sales could generate between $1.3 and $1.9 billion up front, with an additional $400 million in annual revenues thereafter. Following the sale of state-run stores, there would be a public auction of 1,250 retail licenses to sell beer, wine, and liquor to the highest bidders. Because the current version of the bill keeps the state-run stores open, the re-employment provisions contained in the first draft of the bill that were designed to assist displaced PLCB employees find new employment have been deleted in the amended bill.

]]>With the Governor and many Republican legislators pushing for full privatization, further amendments or even reintroduction of some original proposals might be likely before a final version of the new law is ready for a vote. In any event, retail licensees large and small should be keeping a close eye as Pa. H.B. 11 moves through the law-making process. Whether legislators ultimately agree to proceed with the current public-private competition plan or something closer to full privatization, Pennsylvania’s retail sellers and its citizens seem poised for big changes.

Mark B. Conlan is a Director in the Gibbons Financial Restructuring & Creditors' Rights Department. Brett S.Theisen, an Associate in the Gibbons Financial Restructuring & Creditors' Rights Department, co-authored this post.

Lease Extension Notices - New York Appellate Division Ignores Lease Text in Name of Equity

Shepard A. Federgreen — Wed, 04 Jan 2012 13:50:33 -0500

New York’s Appellate Division, First Department, in 135 East 57th Street LLC v. Daffy's Inc. was faced with the following facts. A retail chain had occupied high profile space for about 15 years. The tenant had the right to renew by notice to the Landlord to be delivered by January 31, 2010, a year prior to lease expiration. For no reason other than a mistake by the tenant's controller, notice was not timely given. However an email and fax was sent (dated January 30, 2010) on February 4, 2010, purporting to exercise the option. The landlord on February 5, 2010, rejected the notice as being late, and accused the Tenant of back-dating the notice for its own purposes.

The trial court, for reasons which are not set forth in the appellate opinion, determined the tenant was entitled to equitable relief, and determined the notice exercising the renewal period, although not timely, was nonetheless effective.

The Appellate Division, reviewed the existing law of New York on honoring technically defective lease extension notices and summarized same, quoting Vitarelli v. Excel AutomotiveTech. Ctr., Inc.,

Equity will relieve a tenant from a failure to timely exercise an option in a lease to renew or purchase if (1) the tenant in good faith made substantial improvements to the premises and would otherwise suffer a forfeiture, (2) the tenant's delay was the result of an excusable default, and (3) the landlord was not prejudiced by the delay.

]]>The Court addressed these three tests in reverse order as follows:

1) Prejudice to Landlord - The Court seemingly took judicial notice of the fact the landlord was not prejudiced, which in all likelihood was true given the timing, i.e., tenant provided 11 months and 27 days notice rather than one year's notice of the extension, but since there was apparently no evidence on the issue, not necessarily so.

2) Delay in Notice was due to an "excusable default" - The Court, in one sentence and virtually without discussion, equates the tenant's Controller's "honest mistake" with "excusable default". If an honest mistake constitutes an excusable default one is forced to wonder what set of circumstances would not constitute excusable default.

3) Tenant, in good faith, made substantial improvements that would be forfeited - The Court acknowledged the tenant did not do this, i.e., this prong of the test was not met. Instead, the Court interpreted “good will” associated with 15 years at the location to be a valuable asset that would be forfeited in the absence of equitable intervention.

Then, notwithstanding the dubious thought process as to test two and the outright acknowledgment that test three was not met, but after noting the profitability of the store and the large number of employees who would lose their jobs, ruled the notice was effective.

This case seems to be a tremendous expansion of the existing law, and to stand for the proposition that the Court is free to look at all the facts and do whatever it thinks is right, given all the circumstances. Indeed, seemingly highlighting the lack of predictability, the Court quoted the Court of Appeals in JNA Realty, "By its nature, equitable relief must always depend on the facts of the particular case and not on hypotheticals."

Although the power of the court to “do equity” has a certain appeal (for no one is for unjust results), a system which allows a panel of judges, after the fact, and on a case-by-case basis, to impose their personal set of morals in lieu of the agreement reached between the parties is a system that lacks predictability and precision. And it is a system which is only equitable in the eyes of the party to whom relief is granted - I assure you it isn’t viewed as the least bit equitable by the party who sought to do nothing more than enforce the precise terms of the agreement between the parties.

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

Gibbons to Exhibit at ICSC New York National Conference & Deal Making on Monday and Tuesday

Gibbons P.C. — Fri, 02 Dec 2011 12:13:00 -0500

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

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

We look forward to seeing you there!

ICSC Philadelphia Dealmaking is Upcoming - New Date Scheduled

Howard D. Geneslaw — Wed, 07 Sep 2011 10:27:11 -0500

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.

National Association of Women Lawyers Confers Outstanding Member Award on Nancy Lottinville

Gibbons P.C. — Thu, 28 Jul 2011 13:35:21 -0500

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.

]]>Others honored at NAWL’s Annual Meeting include: Brooksley Born, who received the Public Service Award; Susan Blount, who accepted the President’s Award on behalf of Prudential Financial Inc. Legal Department; Judge Harold Baer of the United States District Court for the Southern District of New York and Marc Firestone , General Counsel of Kraft Foods who each received the NAWL Lead by Example Award; and Michele Coleman Mayes who received the M. Ashley Dickerson Award for the promotion of diversity in the legal profession. NAWL’s most prestigious award, the Arabella Babb Mansfield Award - named for the first woman admitted to a state bar in the United States - was presented to Jamie Gorelick, one of the longest serving Deputy Attorney’s General of the United States, a former general counsel to the Departments of Defense and Energy, a former president of the Washington D.C. Bar and current Co-Chair of the ABA Commission on Legal Ethics.

Ms. Lottinville's colleague, Luis Diaz, Esq., a Director and Chief Diversity Officer at Gibbons, participated in an afternoon CLE program panel which focused on overcoming unconscious bias. Gibbons is also represented within NAWL by Kristin Sostowski, who is a Director in Gibbons Employment & Labor Law Department. Kristen was sworn in as a new member of NAWL’s Executive Board at the NAWL Annual Meeting. Christine Amalfe, Gibbons Employment & Labor Law Department Chair, is also a member of the Board of the NAWL Foundation.

One Month After RECON -- The Outlook for the Second Half of 2011

Howard D. Geneslaw — Fri, 01 Jul 2011 09:19:50 -0500

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

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

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

Expansion of Philadelphia Minimum Wage and Benefit Standards Could Impact Retail and Restaurant Tenants

Alfred R. Fuscaldo — Thu, 20 Jan 2011 13:46:09 -0500

Under a newly enacted City of Philadelphia Ordinance, some tenants in properties developed with financial assistance by the City of Philadelphia may now be required to comply with a minimum wage requirement that is 150% of the federal minimum wage. Benefits provided to full-time employees of tenants may also be impacted.

City Ordinance (Bill No. 100756) was signed into law on January 5th by Mayor Michael Nutter, and will become effective on July 1, 2011.

Pursuant to Title 17-1300 of the City Code, certain employers are required to pay employees (as they are defined in Title 17) an hourly wage, excluding benefits, of at least 150% of the federal minimum wage, as well as provide certain minimum health care benefits for full-time employees. One category of employers that must provide the higher minimum wage and the health care benefits are "City financial aid recipients."

]]>Prior to the newly enacted Ordinance, "City financial aid recipients" were defined as "All persons or entities that receive from the City direct assistance in the form of grants, loans, or loan guarantees, tax incentives, in-kind services, waivers of City fees, or real property in the amount of more than $100,000 in any twelve (12)-month period. This term shall not include those who enjoy an economic benefit as an incidental effect of City policies, regulations, ordinances, or charter provisions."

So, captured under that definition were people or entities, including landlords, that purchased and/or developed properties with financial assistance from the City.

Ordinance No. 100756 has expanded the definition of "City financial aid recipients" to include certain tenants of City financial aid recipients.

The definition of "City financial aid recipients" now includes "a person or entity who (a) leases property or equipment from a City financial aid recipient; (b) employs more than twenty-five" employees; (c) in the case of a not-for profit entity, leases property or equipment for consideration in excess of $100,000 a year; and (d) in the case of a for-profit entity, has annual gross receipts in excess of $1,000,000 a year" so long as "such property or equipment was acquired (in whole or in part) with the City's assistance or was otherwise the subject of the City's assistance and the person or entity receives an intended material benefit from the financial assistance, and such person or entity shall be subject to the provisions of the Chapter for the same compliance period as the City financial aid recipient from which they are leasing the property or equipment."

The impact of this new legislation will likely be most felt by larger retailers and restaurants which lease space from landlords who qualify as "City financial aid recipients". The tenant’s obligation to comply with these standards is concurrent with the time the landlord is subject to them. Compliance by "City financial aid recipients" is required for 5 years following the receipt of the aid.

A prudent tenant should consider inquiring whether its landlord is a “City financial aid recipient” under the Code.

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

Gibbons Exhibits at New York ICSC Show Amid Upbeat Mood

Howard D. Geneslaw — Fri, 17 Dec 2010 17:28:42 -0500

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

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

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

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

Gibbons to Exhibit at ICSC New York National Conference & Deal Making

Howard D. Geneslaw — Fri, 03 Dec 2010 14:36:06 -0500

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

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

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

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

Attendance and Outlook Improve at Philadelphia ICSC

Gibbons P.C. — Thu, 30 Sep 2010 14:46:59 -0500

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.

Time-out: Pennsylvania Passes Permit Extension Act

Alfred R. Fuscaldo — Fri, 16 Jul 2010 13:58:52 -0500

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

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

What Permits Does It Affect?

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

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

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

]]>The Act Does Not Apply to All Permits

The Act does not apply to other statutes, including the:

The Act also does not apply to permits with expiration dates determined by federal law, or to administrative consent orders and enforcement actions for a permit subject to the extension period.

How Long is a Permit Extended?

Under the Act, a permit granted under an applicable statute and having an expiration date after December 31, 2008 may have its expiration date extended until July 1, 2013, regardless of whether the permit was issued before or after the extension period. The Act does not shorten the life of a permit with an expiration date after July 1, 2013.

How Can You Find Out If the Act Applies to Your Permit?

The permit holder can request verification, subject to a fee, from the issuing agency of the existence of a valid permit and its expiration date, but must identify the permit in question and its anticipated expiration date. The issuing agency must tell you in writing within 30 days of receiving your request:

whether you have a permit;
its expiration date; and
stating any issues related to the validity of the permit.

Except in Philadelphia and Pittsburgh, the failure of the issuing agency to respond within 30 days will result in the "deemed affirmation of the existence of the [permit] and the expiration date set forth in the request."

In the City of Philadelphia, in order to exercise its right to extend the permit under the Act, the permit holder must provide the issuing agency with notice of its intent to extend the permit and pay the agency a fee equal to fifty percent of the original application fee, not to exceed $5000. Elsewhere, the issuing agency may charge a fee up to twenty five percent of the original application fee, but no more than $5000, to extend the Permit.

Permits granted pursuant to the MPC are protected from changes in a "zoning, subdivision or other governing ordinance or plan," such that those changes will not affect the permit holder’s right to begin or complete the activities authorized by the permit during the extension period. The extension period is further extended for the length of litigation, including appeals, concerning permits issued under the MPC that prevent the completion of the work authorized by the permit.

The Act brings Pennsylvania into line with New Jersey which enacted its own permit extension legislation in 2008. The Act gives needed flexibility and time to developers who may be facing financial challenges in the current economy. At a minimum, permit holders should consider verifying the viability of permits, and extending them as required, now so they will be in a position to proceed when market conditions warrant.

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