New Jersey Case of the Month: Pinelands Preservation Alliance, et. al. v. NJ DEP, et. al.

June 2014Articles In the Zone

In a published opinion, Pinelands Preservation Alliance v. NJDEP, Doc # A-4880-11T2; A-4883-11T2, the appellate division reversed and remanded for further consideration the CAFRA individual permit issued by the New Jersey Department of Environmental Protection to Jaylin Holdings, LLC for the development of a proposed shopping center on Route 37 in Toms River, New Jersey. The court overturned the CAFRA permit on a narrow fact/policy issue related to the boundaries of the Toms River Coastal Center. However, the court sanctioned consideration of habitat net impact evaluation and mitigation measures in evaluating CAFRA individual permits.

By way of background, in 2004, Jaylin applied for a CAFRA individual permit and related stream encroachment and wetland transition area relief to enable the development of its property. In 2005, evidence of northern pine snake hibernacula was discovered on the Jaylin property. The northern pine snake is a threatened and endangered species pursuant to N.J.A.C. 7:25-4.17. The discovery of the northern pine snake hibernacula lead to the NJDEP’s denial of the original permit application pursuant to N.J.A.C. 7:7E-3.38.

After numerous plan revisions over the next three years, Jaylin filed a revised permit application with the NJDEP. This application reflected plan revisions and mitigation proposals that arose from a nonbinding mediation process Jaylin proposed a variety of different protective measures to minimize impact on the site to the existing hibernaculum, as well as off-site land preservation to facilitate the enhancement of northern pine snake habitat within the northern Pinelands area, but not on the Jaylin property. In 2010, the DEP again denied Jaylin’s CAFRA individual permit application, which was appealed by Jaylin.

In subsequent settlement discussions, the NJDEP and Jaylin agreed to a revised permit application including further revisions to the site plan and additional protective measures for the existing pine snake hibernaculum. In support of the application, Jaylin submitted a Habitat Evaluation Method (HEM) for the northern pine snake. NJDEP also prepared a HEM. In August 2010, as a result of the concerted effort of the NJDEP and Jaylin, a proposed settlement was reached and public comment requested on the settlement. After nearly one year in the comment period, Jaylin and the DEP entered into a stipulation of settlement that resulted in the issuance of an individual CAFRA permit for the project. The appellants challenged this settlement and the validity of the permit on numerous grounds, including that CAFRA regulations do not allow for “net” habitat assessment and valuation; that DEP cannot consider mitigation as a basis for issuing an individual permit; and that the proposed mitigation was inadequate.

The appellate division endorsed the use of the HEM and the preservation of off-site property as effective mitigation, citing the fact that the mitigation measures proposed by Jaylin were within the permissible discretionary authority of the DEP under CAFRA permit regulations. The appellate division analyzed whether the HEM constituted rule making or was a proper “as applied” policy. The court evaluated the HEM under the rule making standards set forth in Metromedia v. Division of Taxation, 97 N.J. 313 (1984). The court held that the HEM did not constitute a rule of general applicability but rather a policy guideline to evaluate the specific impacts of the Jaylin individual permit. The court also resolved an alleged conflict between the Pinelands Comprehensive Management Plan rules and CAFRA’s regulatory authority. In doing so, the court recognized that CAFRA and DEP are not bound by the Pineland’s CMP rules, but appropriately received comment from the commission in determining the scope and grant of the Jaylin permit.

Notwithstanding having prevailed on all the above referenced issues, the appellate division found that the Jaylin individual permit was improperly issued due to a question regarding the applicable impervious coverage limitations pursuant to N.J.A.C. 7:7E-5B. The Jaylin property is located in the prior designated Toms River Coastal Regional Center. CAFRA regulations permit up to 80 percent impervious coverage within a coastal regional center. With the adoption of the Permit Extension Act in 2008, the CAFRA coastal centers were “extended” through December 31, 2014. The coastal center designation is critical to the Jaylin proposal, in that the Jaylin property would otherwise be located within the coastal suburban planning area, which is limited to a maximum of 30 percent impervious coverage. See N.J.A.C. 7:7E-5B.4. The issue regarding the Toms River Regional Coastal Center evolved out of the February 7, 2005, expiration of the center, which was subsequently re-established on February 6, 2006. In reviving the coastal center in 2006, however, the DEP specifically excluded six areas from mainland coastal designation, including endangered and threatened wildlife species habitat. N.J.A.C. 7:70-5B.6(e).

Because Jaylin’s original CAFRA permit application had been filed before February 7, 2005, (expiration of the CAFRA center) Jaylin could rely on a previous center designation to permit development up to the 80 percent impervious coverage. However, the appellate division found that the DEP exceeded its permissible discretionary authority in approving the application under the prior center designation, insofar as the original 2004 application had been rejected by the DEP and a new application had been filed in 2010. As the court struck down the DEP’s issuance of the permit, it observed that “the difficulty in applying N.J.A.C. 7:70-5B.6(g) here, however, it is that, in our view, the actual boundaries of the readopted (extended by the PEA) Mainland Toms River Coastal Regional Center and therefore the boundaries of the Coastal Suburban Planning areas, are unclear.” Slip Opinion at 69 (emphasis in original). Because the exclusion of certain portions of the Jaylin property would necessarily reduce permissible impervious coverage limits, the result was the remand of the matter to the DEP for further consideration on the determination of the applicability of Coastal Center regulations.

For 10 years, Jaylin has been prevented from constructing its proposed development in Toms River, a project that has secured local land use approvals but is still confronted with state level regulatory hurdles. This long and tortured history is yet another tangible exhibit of the problematic nature of New Jersey’s present land use regulatory system. Multiple levels of local, regional and state regulations with conflicting standards often result in lawsuits challenging these various permits, with the ensuing delay and cost associated with judicial review. The result is the extraordinary uncertainty and duration associated with the land use process, which hinders New Jersey’s economic recovery.

View the entire issue of In the Zone (pdf)