Yes, Building in the Highlands Preservation Area is Possible: Court Upholds NJDEP Exemption for Church Project as “Reconstruction” Within “Footprint” of Previous Development

New Jersey’s Highlands Water Protection and Planning Act (Highlands Act), which created and granted substantial powers to a regional Council, has engendered significant controversy, especially with respect to the strict development restrictions it imposes within a statutorily defined preservation area. Certain redevelopment projects, however, are exempt from those restrictions, and a recent Appellate Division upheld the New Jersey Department of Environmental Protection’s (NJDEP) interpretation of key statutory provisions when it determined that a multi-purpose redevelopment project qualified for such an exemption.

Since its enactment in 2004, the Highlands Act has spawned a number of judicial opinions regarding its constitutionality, its retroactivity, and the validity of certain implementation regulations promulgated by NJDEP. (One such case is the subject of a recent post by Gibbons attorney Christina Fullam.)

In In re August 16, 2007 Determination of NJDEP of Exemption, the Appellate Division reviewed NJDEP’s decision to grant Christ Church an exemption from the statute for a project on a 100-acre lot in Rockaway Township that was already the site of office and industrial buildings constructed by a previous owner in the 1990s. The exemption application required NJDEP to determine whether the project qualified for the exemption as a “reconstruction” project that was within 125% of the existing “footprint” of “lawfully existing impervious surfaces” and did not increase that impervious surface by one-quarter acre or more.

NJDEP found that the project satisfied the statutory criteria, and the Township appealed. Applying a doubly deferential standard of review — because it was reviewing both a final agency determination and an agency’s interpretation of a statute that it is charged with enforcing — the court upheld NJDEP’s determinations on all three issues:

  • Carefully reviewing the details of the project, the Appellate Division had no trouble upholding, as based on a permissible construction of the statute, NJDEP’s determination that the project was a “reconstruction of any building or structure for any reason.”
  • Similarly, the court upheld the agency’s reading of the term “footprint” as meaning the area covered by all impervious surfaces, rejecting the Township’s argument that the court should look for guidance to NJDEP’s coastal permitting rules, which define “footprint” in terms of structures only.
  • Finally, the court upheld the formula chosen by NJDEP to decide whether the 125% threshold had been exceeded, and the agency’s decision to consider as part of the site’s “lawfully existing impervious surfaces” 20 acres of wetlands that had been filled without a permit in the 1980s because no citation had ever been issued and the fill had later been mitigated and deemed acceptable by the Army Corps of Engineers.

The court added an important suggestion that may have significant implications for future projects: NJDEP should promulgate regulations that define “reconstruction” and “footprint” (and, presumably, other key terms that are not specifically defined in the statute), to “avoid the ambiguity we confronted in deciding this case.” The court concluded,

Such regulations would not only assist future applicants but would prevent judicial review from being dependent on the unique facts presented. The existing regulatory void carries an undue propensity for ad hoc adjudication.


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