The Remediation Wire - Legal News Regarding The Environment

Due Diligence and the Bermuda Triangle: Getting it Done

April 7, 2016 | No Comments
Posted by Marc Policastro

Co-authored by Melissa A. Clarke

As published in the Spring 2016 edition of Dimensions

Due diligence can make or break a deal, and there is a lot on the line for those charged with getting it right.  (1)   From an environmental perspective in New Jersey, that can be daunting. The Bermuda Triangle of diligence occurs when on-site sources, off-site sources and “unknown” sources converge. Diligence “death traps” become more than manageable when the developer takes a disciplined approach, staying within the ambit of the Site Remediation Reform Act (SRRA) regulations and the various guidance documents provided by the New Jersey Department of Environmental Protection (NJDEP). (2)

Off-Site Source Groundwater Investigation
One of the most commonly encountered scenarios in due diligence occurs when contamination is found proximate to a contiguous parcel, where the contamination is subject to a prior approval which, miraculously, stopped exactly at the property boundary line. Although the developer’s Licensed Site Remediation Professional (LSRP) is empowered to issue a final approval where the contamination is from an “off-site” source, investors will generally demand that the contamination be cleaned up prior to construction. Read more

NJDEP Deadline Looming for Completing Remedial Investigations

January 5, 2016 | Comments Off on NJDEP Deadline Looming for Completing Remedial Investigations
Posted by Marc Policastro

Governor Christie’s signing of Assembly Bill No. 4543 into law in 2014 granted an extension of up to two years for the completion of remedial investigations, postponing the original deadline of May 7, 2014 to May 7, 2016. Those affected by this decision should be aware of the repercussions they will face for failing to meet the May 7, 2016 deadline, including substantial fines and contaminated sites being subjected to the Department’s “direct oversight.” NJDEP has advised that Remedial Investigation Reports and all other required forms must also be completed and submitted by this deadline.  The State’s “direct oversight” program may, among other things, obligate the responsible party to advance significant funds as collateral for required remediation work.

GH&C invites and welcomes further discussion on cases and matters involving remediation or other environmental challenges.

GH&C’s Marc D. Policastro Assists Chelsea Senior Living in Opening a New Facility In Marlboro

October 28, 2015 | No Comments
Posted by Marc Policastro

Marc D. Policastro, shareholder in the Real Estate, Redevelopment & Planned Real Estate Development Department and chair of the Site Remediation Department, was lead attorney in helping a major assisted living company open a new location, The Solana, in Marlboro, NJ. This highly contested case has gone through a number of hearings and special meetings since July of 2012. Read More.

Supreme Court Opens Door for Spill Act Claims

January 28, 2015 | No Comments
Posted by Marc Policastro

On January 26, 2015, in Morristown Associates v. Grant Oil Co., (A-38-13) (073248), the New Jersey Supreme Court confirmed that the general six-year statute of limitations contained in N.J.S.A. 2A:14-1 does not apply to private claims for contribution made pursuant to the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11f(a)(2)(a).  Consequently, individuals or entities deemed to be “responsible parties” as a result of ownership or operations conducted at cleanup sites, may have an opportunity to seek contribution damages from current or prior owners/operators, or other parties, without the constraints of the State’s general 6-year limitations period, which might have otherwise banned such damage claims.

NJDEP Announces New Guidance On "Unrelated Contamination"

October 7, 2014 | No Comments
Posted by Marc Policastro

The New Jersey Department of Environmental Protection (NJDEP) has announced a specific “Guidance Document” and protocol to assist Licensed Site Remediation Professionals (LSRPs) to address contamination that is suspected to be unrelated to a known discharge undergoing remediation.  In essence, the roadmap provided by NJDEP addresses three basic scenarios where:  (1) contamination is suspected to be unrelated to the subject site is identified on the subject site and the subject site is not a heating oil tank at a residential property; (2) contamination is suspected to be unrelated to the subject site is identified off the subject site and the subject site is not a heating oil tank at a residential property; and (3) contamination is identified either on or off the subject site and the subject site is a heating oil tank at a residential property. Read more

Are landlords and Tenants “Jointly and Severally Liable” Under the Industrial Site Recovery Act (“ISRA”)? Under New Jersey Law, May a Landlord or Tenant Force the Other’s Hand to Remediate Environmental Contamination Under ISRA?

May 13, 2014 | No Comments
Posted by Marc Policastro

Under ISRA, landlords and tenants are jointly and severally liable and therefore, the New Jersey Department of Environmental Protection may seek to enforce liability against either party, or both.  N.J.S.A. 13:1D-1 et seq.  ISRA is transaction specific, and the obligation to remediate is triggered by myriad events, including certain changes in ownership and modification of operations involving landlord-tenant relationships.  Accordingly, it is critical that liability for ISRA compliance be spelled out with precision in leases.  For example, the lease may require landlord to comply with ISRA where landlord’s business dealings trigger the ISRA law.  Contrastingly, the lease may require tenant to comply with ISRA upon a cessation of operations or sale of the business or assets.

New Jersey law permits a landlord, or the tenant, as the case may be, to file a formal petition to NJDEP to enforce lease provisions and compel the party responsible pursuant to the provisions of the lease, to comply with ISRA.

Deadline For Completing NJDEP Remedial Investigations Extended For Two Years

January 23, 2014 | No Comments
Posted by admin

On January 21, 2014, Governor Christie signed into law Assembly Bill No. 4543, allowing NJDEP to grant up to 2-year extensions for the completion of environmental “remedial investigations.” Under The Site Remediation Reform Act, remedial investigations are required to be completed by May 7, 2014. The extension option would in many cases obviate the need for the State’s “direct oversight” of non-complying cases.

The looming deadline applies to cases where contamination was identified, or should have been identified, on or before May 7, 1999. Major conditions of applicability for extensions include: (1) retention of a Licensed Site Remediation Professional (2) compliance with existing regulatory “mandatory time frames” (3) posting of a “remediation funding source” or “remediation trust fund” and (4) payment of all applicable fees and penalties. Responsible parties must also be in compliance with requirements addressing “initial receptor evaluations,” “immediate environmental concerns,” “light non-aqueous phase liquid interim remedial measure reports,” “preliminary assessment reports,” and “site investigation reports.”

Applications for extensions must be submitted by March 7, 2014. The State will then have 45 days to notify the applicant of its decision. If an extension is granted, NJDEP will be required to provide notice in the New Jersey Register and include the name and location of the site, the basis for the extension, and the length of the extension.

The ramifications of the new law are widespread, particularly with respect to contractual arrangements and due diligence deadlines affecting real estate and corporate transactional matters, as well as landlord-tenant matters.

Extension of May 7, 2014 Remedial Investigation Deadline

January 14, 2014 | No Comments
Posted by Marc Policastro

Yesterday, Assembly Bill No. 4543 passed in both the Assembly and Senate.  If signed by the Governor, the bill would allow NJDEP to grant up to 2-year extensions for the completion of environmental “remedial investigations.”  Under current law, remedial investigations are required by be completed by May 7, 2014 under the Site Remediation Reform Act.  The extension option would be significant, as it would in many cases obviate the need for the State’s “direct oversight” of non-complying cases.

The looming deadline applies to cases where contamination was identified, or should have been identified, on or before May 7, 1999.  Major conditions of applicability for extensions include: (1) retention of a Licensed Site Remediation Professional (2) compliance with existing regulatory “mandatory time frames” (3) posting of a “remediation funding source” or “remediation trust fund” and (4) payment of all applicable fees and penalties.  Responsible parties must also be in compliance with requirements addressing “initial receptor evaluations,” “immediate environmental concerns,” “light non-aqueous phase liquid interim remedial measure reports,” “preliminary assessment reports,” and “site investigation reports.”

Applications for extensions would be required to be submitted by March 7, 2014. The State would then have 45 days to notify the applicant of its decision. If an extension were granted, NJDEP would be required to provide notice in the New Jersey Register and include the name and location of the site, the basis for the extension, and the length of the extension.

The ramifications of the proposed new law are widespread, particularly with respect to contractual arrangements and due diligence deadlines affecting real estate and corporate transactional matters, as well as landlord-tenant matters.

NJDEP Issues Guidance Document for May, 2014 Remediation Deadline

May 15, 2013 | No Comments
Posted by Marc Policastro

NJDEP has issued a new “Guidance Document”, detailing requirements for satisfying the State’s requirement that “Remedial Investigations” be completed by May 7, 2014.  The Department confirms that the deadline applies to contamination identified, or which should have been identified, on or before May 7, 1999.

Media included in the requirement are soil, groundwater, surface water, sediment and air.  There is not an exemption where contamination has migrated onto a site from another contaminated property.  However, under current NJDEP regulations, responsible parties will not have liability where it is demonstrated that contamination is from an off-site source.  The Department is currently developing a Guidance Document to address proofs necessary to document off-site sources.

Significantly, the new Guidance Document also allows professionals to use “professional judgment” to determine whether sufficient information exists to prove the nature and extent of contamination under applicable NJDEP regulations.  The State has also reconfirmed that delineation of contamination to the “clean zone” is needed in order to justify issuance of final approval in the form of a Response Action Outcome.

Modifying No Further Action Letters

March 1, 2013 | No Comments
Posted by Marc Policastro

Under the new privatized Site Remediation Program, consultants are confronted with situations where previously issued No Further Action Letters (NFAs) have been issued “conditionally”, with a Deed Notice or Classification Exception Area (CEA). In certain instances, CEAs can be lifted where contaminants have degraded to acceptable levels and therefore would have warranted an “unconditional NFA” under the old law. Ambiguity in the law now leaves consultants and responsible parties with uncertainty as to whether a “new” Response Action Outcome (RAO) is legally necessary to validate the removal of conditions to the previously issued NFA. In some cases, lenders or investors may require a new RAO in light of the fact that the CEA has been lifted. It remains to be seen whether the Department will, in all cases, require new approvals in such cases. Responsible parties should be conservative in approaching any modifications to previously issued approvals, whether in the context of NFAs, conditional-NFAs or RAOs.

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