N.J. Appellate Division: Both Parties Were Ineligible for Public Entity Cleanup Grant Where Private Party Conducting Remediation for County’s Benefit Was Not County’s Redeveloper or Agent

For purposes of obtaining financial assistance from the State, cleaning up environmental contamination for a governmental body’s benefit is not the same as cleaning it up on behalf of the government as its formal designee. That is the hard lesson that a former landowner learned in the New Jersey Appellate Division’s August 29, 2018 decision in In re Hazardous Discharge Site Remediation Fund Public Entity Grant Application for Remedial Investigation and Remedial Action.

When Barry Rosengarten contracted to sell a parcel of land in Perth Amboy to Middlesex County for use as open space, he agreed to remediate environmental contamination, and the County escrowed monies from the sale to be released to Mr. Rosengarten as he performed the cleanup. The County also agreed to cooperate in seeking State grants that could offset those costs and thus reduce Mr. Rosengarten’s net cleanup expenses.

Through Mr. Rosengarten’s counsel, the County applied to the New Jersey Department of Environmental Protection (NJDEP) for either a Brownfield Development Area Grant or a 75% Recreation and Conservation Grant. NJDEP denied the application after finding that the County was not performing the cleanup and that the contract did not provide that Mr. Rosengarten was doing the work on the County’s behalf.

On Mr. Rosengarten’s appeal, after initially holding that Mr. Rosengarten had standing to appeal even though he was not the applicant, the Court affirmed NJDEP’s denial of the application. The relevant statutory provision, N.J.S.A. 58:10B-6.a(2)(a), authorized grants to “municipalities, counties, or redevelopment entities,” making Mr. Rosengarten himself ineligible. Furthermore, the County was ineligible because it did not perform the remediation work, incur any cleanup expenses, or designate Mr. Rosengarten as a “redeveloper” or as its agent for purposes of the remediation. Nor was the County eligible for a recreation and conservation grant under N.J.A.C. 19:31-8.3(b)(2), as the parcel was not part of any comprehensive development or redevelopment plan.

With the best of intentions, the parties here sought to use the Hazardous Discharge Site Remediation Fund to advance the very purpose for which it exists – cleanup of environmental contamination on publicly owned land. Their contract, however, left too much of a gap between the private party doing the cleanup and the public entity that would benefit from that cleanup. Parties to similar arrangements in the future will do well to heed the lesson from this case.

Paul M. Hauge is Counsel in the Gibbons Environmental Department.
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