Category: Development/Redevelopment

What Parcel? SCOTUS Hears Arguments in Case Poised to Clarify the Court’s Regulatory Takings Jurisprudence

The Supreme Court of the United States entertained arguments on Monday, March 20, 2017 in a case likely to fortify its Fifth Amendment regulatory takings jurisprudence. The case, Murr v. Wisconsin, is on appeal from Wisconsin’s high court and, when decided, should answer a question left open by the Court’s 1978 ruling in Penn Central Transportation Company v. City of New York. In Penn Central, the Court instructed that in determining whether a regulation has gone far enough to constitute a taking of private property, courts should not limit their analysis to the regulation’s effect on some discrete segment or portion of the subject property, but should instead consider the regulation’s interference with property rights “in the parcel as a whole.” The question of how reviewing courts should define that parcel, however, has gone unanswered for decades. Enter the Murr children, whose parents purchased two adjacent tracts of land along the St. Croix River in the early 1960s. The Murr parents built a cabin on the first lot and maintained title to it in the name of their business. The second lot, purchased afterwards, was kept in their name and remained largely undeveloped. In 1976, a county ordinance was passed establishing new minimum lot size requirements for properties in the area. While this ordinance contained an exception for...

Gibbons Part of Team Nominated by NAIOP for Mixed-Use Deal of the Year

NAIOP New Jersey, the commercial real estate development association, has announced the finalists for its Deal of the Year Awards. Gibbons P.C. was part of the team nominated for Mixed-Use Deal of the Year for the project involving the disposition of the Hoffmann-La Roche US headquarters in Nutley and Clifton, New Jersey. Winners in the categories of Industrial Deal of the Year, Office Deal of the Year, and Mixed-Use Deal of the Year will be announced at the 30th Annual Commercial Real Estate Awards Gala on May 11, 2017. Gibbons was part of the team that led the successful sale of the former 116-acre headquarters and research and development campus of Hoffmann-La Roche, which spans the municipalities of Nutley and Clifton, to Prism Capital Partners and a Boston-based investment manager. As part of the transaction, a joint venture between Hackensack University Medical Center and Seton Hall University will lease two of the campus buildings and 16 acres of the property for the new Seton Hall–Hackensack Meridian School of Medicine, the first new private medical school in New Jersey in over 40 years. The new site will also house Seton Hall’s College of Nursing and its School of Health and Medical Sciences, along with a National Health Institute-designated Clinical Research Center that Hackensack Meridian plans to...

Time of Application Rule Protects Against Zoning Changes Only if an Application for Development Complies with All Ordinance Submission Requirements, New Jersey Appellate Court Rules

The New Jersey Appellate Division, in the published decision Dunbar Homes, Inc. v. The Zoning Board of Adjustment of the Township of Franklin, et al., recently declared what materials a developer must submit to a municipal land use board in order to constitute an “application for development” which triggers the protections of the Municipal Land Use Law’s (“MLUL”) “time of application” rule, N.J.S.A. 40:55D-10.5. Dunbar Homes establishes that an application is afforded the protections of the “time of application” rule from the time when an applicant submits an application form and all accompanying documents required by ordinance for approval. A formal finding that an application is “complete” by the municipality is not required. Thus, Dunbar Homes requires that the application essentially must be complete, even though that need has not yet been officially determined. The MLUL’s “time of application” rule provides that the ordinances and regulations in effect “on the date of submission of an application for development” govern review of that application. This reverses the longstanding “time of decision” rule whereby municipalities could change the zoning regulations at any time prior to the approval of an application for development, even where the change was enacted during a public hearing process specifically for the purpose of derailing a pending application. Under the “time of application” rule,...

Emerging Trends: E-commerce Continues to Increase Demand for New Jersey Warehouse Space

The dramatic increase in the number of shoppers purchasing goods online continues to drive demand for warehouse and distribution space in the northeast. According to Census Bureau estimates, e-commerce now accounts for more than 8% of all U.S. retail sales, a near doubling of e-commerce’s retail market share in five short years. With internet shopping becoming the new norm, customers expect shorter and shorter delivery schedules. Speedy delivery options, such as same-day shipping, can create a competitive advantage in the New York metropolitan area, but retailers can only capitalize on that advantage if goods are stored close to their final destination. Enter the modern warehouse and distribution facility in northern New Jersey. With millions of affluent residents and easy access to Manhattan, this area is the perfect location for retail operators to establish a warehouse and distribution center. The problem is that existing, vacant warehouse space is not so easy to find in a competitive market that’s highly regulated and over-developed. According to The Wall Street Journal, certain savvy owners, developers, and redevelopers have already recognized the shortages on the supply side and are converting large office buildings into big box warehouse space. Vacant properties with good access to major highways, perhaps underutilized due to environmental, zoning or other constraints, also offer high upside potential. Of...

David Freeman to Speak at New York City Brownfield Partnership Seminar

David J. Freeman, a Director in the Gibbons Environmental Department and Co-Chair of the Brownfields Task Force of the Environmental Law Section of the New York State Bar Association, will speak at an upcoming seminar on “New York State’s Brownfield Cleanup Program: What to Look for in 2017.” The seminar is sponsored by the New York City Brownfield Partnership and will take place on February 7 from 9:00 to 10:00 a.m. Mr. Freeman and other panel members will review the major changes to the Program made by the 2015 amendments to the state’s Brownfield Cleanup Act, including the new definition of “brownfield site”; new deadlines for admission to the Program and for issuance of Certificates of Completion; new rules and DEC procedures with respect to costs that qualify for site preparation tax credits; and restrictions on tangible property credits for properties in New York City, including DEC’s new definition of an “underutilized” site.

New Jersey Supreme Court Decides “Gap Period” Affordable Housing Need is to be Included in Present Need, Returns Cases to Trial Courts

The Supreme Court of New Jersey today issued its opinion in In re Declaratory Judgment Actions Filed by Various Municipalities partially affirming the decision of the Appellate Division, but expanding the definition of “present need” to include affordable housing need as it arose during the period from 1999 through the present. This decision recognized that the constitutional obligation to provide realistic opportunities for the construction of affordable housing did not stop in 1999, but has continued ever since, and provides some guidance for trial courts in how to determine the scope of that need. In effect, this decision modifies the decision of the Appellate Division by requiring trial courts to take the gap period need into consideration.

N.J.’s Proposed Changes to Low Income Housing Tax Credit Qualified Allocation Plan Limit Projects per Developer and Encourage Development in Smart Growth Areas

The N.J. Housing and Mortgage Finance Agency (“HMFA”) recently proposed changes to the Low Income Housing Tax Credit (“LIHTC”) Qualified Allocation Plan (“QAP”). State housing credit agencies, like HMFA, are required to create plans which outline the selection criteria for awarding tax credits for the development of low- and moderate-income housing. The proposed amendments update the QAP to reflect procedural changes to the way in which affordable housing is constructed, but also include some substantive changes to both the allocation of tax credits among developers and the scoring system for awarding tax credits.

Recent New Jersey Case Serves as Warning to Redevelopers of Contaminated Sites

A recent New Jersey Appellate Division case concerning spoliation of evidence in the context of a contribution action under the New Jersey Spill Compensation and Control Act (“Spill Act”) counsels caution on the part of redevelopers of contaminated sites. The case makes clear that owners of contaminated sites must endeavor to preserve physical evidence related to the contamination as soon as litigation becomes “probable” if they hope to rely on that evidence in a future contribution action.

Following the Expiration of the Permit Extension Act, Keep in Mind the Impact of Statewide Non-Residential Development Fees

With an improving economy, developers who have weathered the storms of economic recession and have projects approved prior to July 17, 2008, the effective date of the Statewide Non-Residential Development Fee Act, N.J.S.A. 40:55D-8.1 et seq. (the “Act”), may finally be in a position to construct many of these projects. However, with changes in the market and demand for certain types of commercial space outpacing those approved in the 1990s and early 2000s, approvals that have been tolled since 2007 by the Permit Extension Act (N.J.S.A. 40:55D-136.1 et seq.) may need to be altered to accommodate new marketplace demands. In seeking amendments of those approvals, developers should be aware of, and consider the potential application of, the affordable housing development fee to those projects.

FEMA Amendments to Base Floor Elevation Requirements, When Minor, Do Not Necessarily Give Rise to Hardship Showing for Height Variance Says NJ App Div

In its recent decision in Richmond URF, LLC v. Zoning Board of Adjustment of the City of Jersey City, the Appellate Division held that a minor alteration in base floor elevation requirements in the wake of FEMA’s amendments to the regulations after SuperStorm Sandy does not necessarily give rise to showing a hardship in support of a height variance under N.J.S.A. 40:55D-70(d)(6).