Gibbons Law Alert

Gibbons Law Alert

Tagged: New Jersey

Real Estate and Pass-Through Provisions of the New Tax Act

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Posted in Transactional Real Estate and Leasing

On December 29, 2017

The new Tax Act was signed into law on December 22, 2017. Holders and developers of commercial real estate will be impacted by certain provisions of the new Tax Act, such as its treatment of real property depreciation deductions, 1031 like-kind exchanges, and pass-through rates. We direct you to our recent Legislative Tax Alert for a more detailed overview of certain relevant provisions of the new Tax Act. If you have questions or concerns about how the new Tax Act will impact you or your business, please contact Russell B. Bershad, a Director in the Gibbons Real Property Department, or Peter J. Ulrich, a Director in the Gibbons Corporate Department.

Casino Reinvestment Development Authority Releases Proposed Land Development Rules for Atlantic City Tourism District

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Posted in Development/Redevelopment

On October 9, 2017

The Casino Reinvestment Development Authority (“CRDA”) recently released for public comment its proposed land use regulations for the Tourism District within Atlantic City. CRDA oversees all land use planning within the Tourism District, which spans from the beaches and boardwalk of Atlantic City north to the Convention Center, and stretches from the Absecon Inlet south to Ventnor City. These rules are proposed to establish new procedural and substantive standards for applications for development being proposed within the Tourism District. The next public hearing on the proposed regulations is scheduled for October 10, 2017 at the Atlantic City Convention Center at 6:00 PM. Written comments may be submitted by November 17, 2017 to CRDA.

NJ Municipality’s Implied Acceptance of a Private Lane as a Public Road Requires Actions Consistent with Ownership or Evidencing Intent to Treat the Lane as Dedicated to Public Use

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Posted in Development/Redevelopment

On October 3, 2017

The New Jersey Appellate Division recently affirmed the Chancery Division’s determination that a municipality only impliedly accepts a private lane as a public road if it takes actions consistent with ownership or that otherwise evidence an intent to treat the land as dedicated to public use. In Holloway v. McManus, et al., an unpublished decision, an applicant sought to subdivide his property, which had access solely by way of a 25 foot wide unimproved dirt and gravel lane running across the McManus defendants’ land, into 13 residential lots. In connection with this application, the applicant requested the Township of Jackson provide permanent access to the property by declaring the unimproved lane a public road. The unimproved lane was depicted on a number of public documents, including: (i) a 1974 survey, which showed the path as a 10 to 12 foot “sand road”; (ii) the Township’s tax maps, which indicated the lane was a 25 foot “utility access easement”; and (iii) a 2002 subdivision map, submitted to the Township by another non-party development, which showed the path as a 25 foot “dirt and gravel utility access easement to be dedicated to [the] Township,” which was referenced in the legal description of the McManus defendants’ deed to their property. Nearby landowners, including the McManus defendants, objected to...

All in the Family: N.J. Appellate Division Holds That Status of Pre-1983 Purchaser as “Innocent Party” Applied to Current Owner Despite Property Transfers Among Family Members Via Trusts

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Posted in Environmental and Green Issues

On September 22, 2017

Reversing the denial of an application for an “innocent party” grant, the New Jersey Appellate Division recently held in an unpublished opinion, Cedar Knolls 2006, LLC v. New Jersey Department of Environmental Protection, that property transfers among family members, even through the use of trusts, are not “changes of ownership.” Thus, a corporation that acquired a parcel of land in 2006 was eligible to seek an “innocent party” grant that is available only to pre-1983 transferees because the property had remained within the same family since its original acquisition in 1977. The property at issue was originally acquired in 1977 by Robert Higginson, well before the December 31, 1983 cutoff for eligibility as an “innocent party” under New Jersey law. Upon his death 16 years later, he bequeathed the property to his wife through two 50% shares placed into separate trusts. His wife then assigned her shares in the property to two new trusts. The interests of those trusts in the property were subsequently transferred to their son, who created a new entity, Cedar Knolls 2006, LLC, to which he transferred the two 50% shares, making Cedar Knolls the sole owner of the property. Nine years later, Cedar Knolls applied for an innocent party grant to cover the costs of remediating the property. NJDEP denied the...

NJDEP Announces Change to Remediation Standards for Certain Contaminants

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Posted in Development/Redevelopment / Environmental and Green Issues

On September 20, 2017

On September 18, 2017, the New Jersey Department of Environmental Protection (“NJDEP”) announced updated soil remediation standards for 19 contaminants. The updates are based on changes to toxicity data for the specified contaminants maintained by the United States Environmental Protection Agency in the agency’s Integrated Risk Information System database. Responsible parties and others conducting cleanups should consult with their Licensed Site Remediation Professionals and other environmental consultants regarding the applicability of the new standards to their sites. The new standards are in effect as of September 18, 2017. A copy of the updated standards can be viewed at NJDEP’s website.

New Jersey Appellate Division Warns Planning Boards That Avoiding Controversy Risks Automatic Approval

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Posted in Development/Redevelopment

On August 30, 2017

When reviewing land use applications, “the rule of law is paramount and cannot be sidestepped to avoid deciding unpopular land use applications.” In issuing this reminder, the New Jersey Appellate Division recently affirmed the automatic approval of a site plan application that modified a planned unit development approval (PUD) dating back to 1997, underscoring the principle that land use applications are to be adjudicated on the merits in a timely fashion. In Shipyard Associates v. Hoboken Planning Board, et al., an unpublished decision, a developer was granted PUD approval in 1997 for a mixed use waterfront project that included residential high-rise apartment buildings, commercial retail space, a parking garage, and tennis courts. The developer constructed the project, except for the tennis facilities, and, in 2011, applied for site plan approval to build two additional residential towers instead of the tennis courts. Although the applicant was deemed complete in October 2011, the matter was not scheduled to be heard at a Planning Board meeting until approximately eight months later. In the interim, the City sued the developer seeking to enforce its perceived rights under the developer’s agreement for the 1997 PUD approval. Due to the filing of that lawsuit, when the Planning Board finally turned to the application in July 2012, the Planning Board refused to consider...

Mere Fact That Application Would Bring Development Closer Into Compliance With Zoning Code Insufficient to Warrant Grant of Site Plan Approval and Variance, N.J. Appellate Division Affirms

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Posted in Development/Redevelopment

On August 2, 2017

The New Jersey Appellate Division recently affirmed denial of an application for site plan approval and variance relief despite an applicant’s contention that the application’s issues identified by the Planning Board were too minor to justify denial of the application that would bring the subject property into conformity with the zoning code. Although unpublished and nonbinding, the decision confirms New Jersey courts’ broad deference to local boards in this state, making clear that if a land use board’s legitimate concerns are not addressed by an application, the mere fact that the application would bring a property into conformity with the local zoning code is insufficient to secure a variance under New Jersey’s Municipal Land Use Law. In World Wheat Foundation, Inc. v. Planning Board of the Township of Saddle River, et al., a church-based, not-for-profit organization, sought site plan approval and variance relief to convert a property that previously served as a residential facility for the elderly into a vocational school to assist Korean families with language and the arts. The previous facility ceased operations more than two years prior to the application. The property was situated in the Township’s Secondary Business Zone, in which the former residential facility was not a permitted use, but the proposed vocational school was permitted. The applicant also sought...

N.J. Appellate Division Affirms Default Approval of Substantially Complete Application for Redevelopment Project

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Posted in Development/Redevelopment

On July 7, 2017

The New Jersey Appellate Division recently affirmed a trial court’s grant of an automatic site plan approval for an 87-unit multi-family residential project with possible commercial space on the ground floor in Jersey City. The decision simultaneously sheds light on what it means for an application to be “complete” and when the Municipal Land Use Law’s proverbial 95-day stopwatch for the grant or denial of preliminary approval begins ticking. In Bright and Varick Urban Renewal Co. LLC v. Jersey City Planning Bd., after the City designated the subject property as an area in need of redevelopment and adopted a redevelopment plan, the designated redeveloper filed an application seeking site plan approval for the project. The City’s Principle Planner informed the redeveloper that it needed to submit an additional 12 outstanding items before the application would be considered. The redeveloper submitted 11 of the 12 outstanding items, and stated it would provide the twelfth item upon request. Thereafter, the Principle Planner confirmed in writing that the application was “substantially complete,” and requested the redeveloper make minor changes to its plans without mentioning the twelfth outstanding item. Two months later, the City had concerns about the density of the project, tabled the application for another approximately two months, and then ultimately denied the application due to the...

Appellate Division Holds UHAC Regulations Preempt Local Code Provisions on Affordability Controls for New Developments

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Posted in Development/Redevelopment

On June 22, 2017

In an unpublished decision entitled Avalon Princeton, LLC v. Princeton et al., the Appellate Division has affirmed that certain state affordable housing regulations preempt pre-existing municipal ordinances, setting a period of affordability controls for “at least 30 years” on new construction. Although not precedential, this decision provides insight on how courts may view some of the regulatory framework, particularly regarding municipal versus state regulation of newly constructed affordable units, and potentially forecasts much more flexibility for municipalities in controlling their current and future stock of affordable housing. In order to assure that affordable housing units remain affordable for a period of time, municipalities have long required that properties that are affordable to low- and moderate-income families be encumbered with some form of restrictive covenant running with the land for both rental and owner-occupied properties. The length of term of these restrictions have varied, based on the municipality and the nature of the units, but typically ran for 30 years from the date of first occupancy, and traditionally have automatically expired after that period. Following the introduction of the Fair Housing Act, these standards varied as COAH’s regulations were refined and developed over the course of the various iterations of the First, Second, and Third Round Rules. In 2004, however, the Housing and Mortgage Finance Agency...

Proposed N.J. Assembly Bill Allocates a Share of PILOT Funds to School Districts

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Posted in Transactional Real Estate and Leasing

On June 19, 2017

As reported in the June 16, 2017 NAIOP WeekEnder, a bill is pending in the Assembly requiring five percent of each annual service charge under a PILOT agreement in connection with a residential redevelopment be remitted to the school district. At present, a municipality retains 95 percent of PILOT payments, the other five percent being remitted to the county. Conventional real estate tax payments are divided among the town, county, school district, and some other stakeholders, such as a fire district, municipal open space, etc. The splits vary, but the school district portion is substantial, often the largest share. To use one example, in Sayreville, the 2016 allocation to the school district is 55.74%; the municipal share is 26.49% and the county share is 14.79%. It is often contended that PILOTs are unfair to school districts because none of the PILOT payment is allocated to the school district. Indeed, school districts have challenged PILOT agreements in court. See, for example, the unreported 110 page, 2005 decision of Mercer County Assignment Judge Feinberg Hamilton Township Board of Education vs. Township of Hamilton and 240 Princeton Urban Renewal, LLC. Whether or not PILOTs truly adversely impact school district budgets is a matter of debate. Regardless of the merits of the debate, it is fair to ask if remitting five percent of PILOTs...

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