Officials, Industry Experts Discuss New Processes and Policies Affecting Real Estate Development

On Jun 19, 2020

Government officials and industry experts addressed the COVID-19 pandemic’s impact on how the state’s regulatory agencies are operating, what the Legislature is prioritizing and the effect it is having on the real estate development process during NAIOP New Jersey’s annual Regulatory, Legislative & Legal Update. The agenda for the virtual event, part of the commercial real estate development association’s Building a Better NJ series, ranged from the latest on reopening efforts to compliance with new green infrastructure stormwater rules.

Keynote Jose Lozano, president and CEO of Choose New Jersey and co-chair of the state’s Restart & Recovery Advisory Council, shared insights on the COVID-19 response and higher-level policy issues that will affect decisions going forward.

“The advisory council is a fast-paced group that meets weekly to discuss everything from reopening to recovery,” said Lozano. “We send synthesized input to the governor’s office and our work has positively impacted the pace of the reopening of key sectors. We know folks are frustrated that we are not opening faster, but we did not get this far to just flip a switch.”

Asked when businesses that remain shuttered might expect to reopen as part of the governor’s Stage 3 plan, Lozano said, “It will be much sooner than when we first thought about it. I would start dotting your i’s and crossing your t’s for how to come back, and have those conversations with your people so you will not be caught off guard.” He also said that liability coverage for businesses that are actively following protocols is an issue that is being considered at both the state and federal level.

As for ramping up efforts to get ahead of the pandemic, Lozano emphasized the work being done by the Department of Health and Rutgers University on a contract tracing program that will complement what has been set up at county and local health departments. “Contact tracing is what will allow New Jersey to stay open and help control hot spots or regional outbreaks where the virus is spreading.”

Lozano noted that in the first six months of 2020, Choose NJ has been responsible for bringing 21 businesses to the state, half of which are international companies. “The most common question I get is who is coming to New Jersey at this point, and my response is that many people are. COVID-19 may have slowed the momentum, but it has not stopped businesses from being attracted to our state.”

Changes in Processes, Procedures and Policy at DEP, DCA

Marilyn Lennon, senior vice president and a principal with PS&S, moderated a discussion on how the New Jersey Department of Environmental Protection (DEP) and Department of Community Affairs (DCA) have adapted procedures during the COVID-19 pandemic to help developers navigate the state’s challenging regulatory approval process.

Shawn LaTourette, chief of staff to DEP Commissioner Catherine McCabe, said the agency rapidly responded to the COVID-19 crisis by shifting every program or service to a virtual platform. While the change has been successful, Lennon noted that accessing DEP staff by phone has been difficult and asked if there were plans to increase staff accessibility. “If you or your clients are having a problem, we will run it down. There may be a delay, but you should not experience issues reaching a project reviewer,” said LaTourette.

In terms of addressing development issues impacting NAIOP NJ members, in particular LaTourette said, “There have been extensions to review deadlines, but our paradigm has been hewing as close as we can to that 90 days. We also issued a number of compliance advisories to guide regulatory committees to put in place measures so companies could operate in this flexible space.”

He noted that the DEP’s overarching goal has been not to sacrifice standards, but to instill a level of flexibility that supports the industry. “The focus is on protecting the environment first and ministerial details second. Relaxation does not equal diminished protection of the environment.”

Robert Austin, a code specialist with the DCA Division of Codes & Standards, said, “When things went haywire in mid-March, we crafted language to modify the uniform construction code to provide leeway and a relaxation of the rules. Companies must meet regulations, but on another level that ensures continuity of construction without endangering public welfare.”

Guidance covered construction offices that were able to remain open and those that had to close due to COVID-19-related issues. “Administrative actions could be done from home, but inspections were a problem,” said Austin. “If in-person inspections were not possible, we urged companies to be crafty about getting compliance in a different manner, like using photos, Zoom or Skype. Ensuring properly catalogued and organized documentation has been key.”

Asked if there was support at the DCA for codifying the virtual inspection process post-pandemic, Austin said, “No. Virtual does not replace the need for someone to be physically onsite to notice every nuance and discrepancy.”

Land Use: Regulatory Adoptions and Proposals

Climate change, site remediation standards and contaminants of emerging concern were some of the key regulatory issues discussed by a second panel of experts led by Dennis Toft, chair of Chiesa Shahinian & Giantomasi’s Environmental Group.

Despite delays due to COVID-19, the DEP has continued to pursue ongoing climate change initiatives. “Temperature and sea-levels are rising faster in New Jersey than in most of the country, presenting threats to our economy and way of life,” said LaTourette. In January Governor Murphy signed Executive Order 100, known as NJ PACT (Protecting Against Climate Threats), directing the DEP to make sweeping regulatory reforms to mitigate and adapt to climate change.

“The initiative begins with two primary pieces of work to reduce greenhouse gases in a more targeted and cost-effective way,” said LaTourette. “The goal is to reach 80% of the 2006 baseline by 2050.” The PACT initiative also calls for incorporating climate change science into land use rules to assist in making asset-based decisions.

Mark Pedersen, assistant commissioner for the DEP’s Site Remediation and Waste Management program, provided an update on remediation standards proposed April 6. “A public hearing is scheduled for July 21, and we are committed to updating guidance documents for those changes we are suggesting,” he said.

Regarding New Jersey’s Site Remediation Reform Act (SRRA 2.0), Pedersen noted, “We are currently amending the rules to reflect the amendments adopted last fall.” In addition, PFOA and PFOS groundwater quality standards were finalized and went into effect June 1, and FAQs are in the process of being developed.

EWMA president Don Richardson addressed emerging contaminant challenges practitioners are seeing in the field. Drinking water standards for PFAS compounds have been codified and formalized into regulations regarding water quality standards. However, Richardson believes evaluating soil will present ongoing challenges in terms of accuracy and precision. “We are holding our breath as to whether it will have an impact on verification of soils going to and from different sites. In the redevelopment world, it is crucial to be able to reuse soil in a way that is practical and will work from a performance standpoint.”

Richardson stressed that professionals and the DEP need to work together to evaluate whether PFAS tests are applicable versus casting a wide net. “It makes no sense to test if there is no reason to.”

C1 Waters Adoption, New “Green Infrastructure” Stormwater Rules

Bob March, senior project scientist with Langan Engineering & Environmental Services, summarized two recent changes to surface water rules. The USEPA Navigable Waters Protection Rule is the second step in a two-step process to revise the definition of “waters of the U.S.” as mandated by a 2017 presidential Executive Order. Published in April and effective June 22, it provides clarity and consistency on what wetlands/waters are regulated under the Clean Water Act.

“The rule outlines four categories of jurisdictional waters, which are not new,” said March. “Past guidance had not been provided for the non-jurisdictional features, the most significant of which is ephemeral streams. These are defined as a feature that flows in direct response to precipitation.”

The DEP has amended its Surface Water Quality Standards to designate approximately 600 miles of streams for Category 1(C1) protection, affecting over a dozen counties in the state. “Under the DEP’s Flood Hazard Areas Control Act Rules, a 300-foot riparian zone applies to all C1 waters and the agency can restrict the removal of vegetation in the riparian zone. Sewer service also is typically unavailable,” said March.

The DEP’s new stormwater management regulations remove nonstructural strategies from design standards and replace them with new green infrastructure design standards. Tony DiLodovico with Bowman Consulting said, “Nonstructural strategies have not gone away, they have been moved to function as planning principles. In addition, the regulations define and clarify green infrastructure, stormwater runoff quality standards and how to calculate runoff and recharge.”

He noted the most significant aspects of the rule change are the Best Management Practices (BMPs) used to meet water quality, water quantity and groundwater recharge requirements. In addition, changes in stormwater modeling criteria will result in smaller BMPs, maximizing developable area on a site.

DiLodovico, who provided examples of designs featuring bioretention and infiltration basins, pods with vegetation and porous pavement, added, “The new rules have been adopted but do not go into effect until March 2, 2021 to give developers time to prepare.” A complete guide is available at https://developersguide.njfuture.org/.

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