JDN REAL ESTATE-HAMILTON, L.P v. STATE OF NEW JERSEY, DEPARTMENT OF THE TREASURY

(NOTE: The status of this decision is published.)
 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3138-05T53138-05T5

JDN REAL ESTATE-HAMILTON, L.P.,

Plaintiff-Appellant,

vs.

STATE OF NEW JERSEY, DEPARTMENT

OF THE TREASURY, BRADLEY ABELOW,

STATE TREASURER, JOHN E. MCCORMAC,

former STATE TREASURER, NEW JERSEY

COMMERCE, ECONOMIC GROWTH, AND

TOURISM COMMISSION, VIRGINIA S.

BAUER, CHIEF EXECUTIVE OFFICER

AND SECRETARY AND REV. WILLIAM D.

WATLEY, former CHIEF EXECUTIVE

OFFICER AND SECRETARY,

Defendants-Respondents.

______________________________________

 

Submitted: September 20, 2006 - Decided:

Before Judges Cuff and Fuentes.

On appeal from the a Final Agency Decision of the Department of the Treasury.

Klehr, Harrison, Harvey, Branzburg & Ellers, attorneys for appellant (Marc H. Stofman, on the brief).

Anne Milgram, Acting Attorney General, attorney for respondents (Patrick DeAlmeida, Assistant Attorney General, of counsel; Laura M. Rivkin, Deputy Attorney General, on the brief).

PER CURIAM

In this appeal, we review a final decision of the State Treasurer who denied plaintiff JDN Real Estate-Hamilton L.P.'s (JDN) application to enter into a redevelopment agreement with the State of New Jersey pursuant to the Brownfield and Contaminated Site Remediation Act (Brownfields Act), N.J.S.A. 58:10B-1 to -31. We affirm.

JDN submitted an application to the Brownfields Redevelopment Incentive Program to enter a redevelopment agreement. JDN proposed to build a massive retail center known as Hamilton Marketplace on Route 130 in Hamilton Township near the junction of Route 130 and I-195. The project would be built on open space consisting of woodland and agricultural land. The Chief Executive Officer and the Secretary of the Commerce, Economic Growth and Tourism Commission endorsed the application. The State Treasurer rejected the application, and on January 9, 2006, the State Treasurer issued a final agency decision denying the JDN application. By the time the application was definitively denied, the project had been completed and a thriving retail center was in operation.

On appeal, JDN argues that the State Treasurer improperly denied its application on the basis that it was not a "Brownfields" project. JDN also contends that the State Treasurer improperly denied the application on the bases that there was no evidence of contamination at the site that posed a health risk to residents and that the project did not require financial assistance. Defendant responds that the proposed project was not the type of development project contemplated by the Brownfields Act and that the developer failed to demonstrate that the financial assistance available through a Brownfields development agreement was required to commence or complete the project. In short, the State argues that the proposal was "a clear mismatch between the [Brownfields] Act and the JDN project."

The purpose of the Brownfields Act is to remove impediments in the law and create incentives to promote and facilitate the cleanup and reuse of New Jersey's older industrial sites. N.J.S.A. 58:10B-1.2. The statute is intended as an incentive to clean up and reuse contaminated sites "often referred to as brownfields." Ibid.

In furtherance of its purpose, the Brownfields Act assigns duties to several State agencies including the Department of Environmental Protection, the Brownfields Redevelopment Task Force, the New Jersey Commerce, Economic Growth and Tourism Commission, the Economic Development Authority, the Redevelopment Authority, and the State Treasurer. Effectuation of the Brownfields Act requires cooperation among the agencies charged with its implementation.

The State Treasurer has several roles in the Brownfields scheme including the authority to approve redevelopment agreements. The Chief Executive Officer and Secretary of the Commerce and Economic Growth Commission share this authority. N.J.S.A. 58:10B-27a provides:

The decision whether or not to enter into a redevelopment agreement is solely within the discretion of the Chief Executive Officer and Secretary of the Commerce and Economic Growth Commission and the State Treasurer and both must agree to enter into a redevelopment agreement. Nothing in P.L. 1997, c. 278 (C.58:10B-1.1 et al.) may be construed to compel the Secretary and the State Treasurer to enter into any redevelopment agreement.

By its terms, the State Treasurer and the Secretary are co-equal decision makers. The assent of both is required to every redevelopment agreement.

The Brownfields Act contains limitations and requirements on the exercise of the discretion reposed in both officials. N.J.S.A. 58:10B-27b sets forth the following considerations to guide the decision-making process. Section 27b directs that the Secretary must consider the following factors in reaching a decision:

(1) the economic feasibility of the redevelopment project;

(2) the extent of economic and related social distress in the municipality and the area to be affected by the redevelopment project;

(3) the degree to which the redevelopment project will advance State, regional and local development and planning strategies;

(4) the likelihood that the redevelopment project shall, upon completion, be capable of generating new tax revenue in an amount in excess of the amount necessary to reimburse the developer for the remediation costs incurred as provided in the redevelopment agreement;

(5) the relationship of the redevelopment project to a comprehensive local development strategy, including other major projects undertaken within the municipality;

(6) the need of the redevelopment agreement to the viability of the redevelopment project; and

(7) the degree to which the redevelopment project enhances and promotes job creation and economic development.

[N.J.S.A. 58:10B-27b.]

Here, the State Treasurer did not agree with the Secretary's disposition of the JDN application; therefore, it was incumbent on him to issue the decision document. As a co-equal participant in the decision-making process, the State Treasurer correctly referred to the factors delineated in the statute.

The State Treasurer found that the proposed project did not qualify for assistance under the Brownfields Act because "[t]o be viable, this project does not need financial assistance from the State." The State Treasurer also acknowledged that pesticides used in the agricultural operations on the site caused contamination on a part of the site and that remediation was required. The State Treasurer also found that "there is no evidence that any of this contamination resulted in a health risk to nearby residents." He also found that only "a tiny portion of the developer's expenses, specifically $1.37 million or 2% of the total cost," was required to remediate the site.

The State Treasurer also found that the Hamilton Marketplace proposal was not the type of project contemplated by the Brownfields Act. Citing the former agricultural use of the site and the limited scope of the contamination, the State Treasurer opined:

This property was not form[er]ly zoned, nor used for commercial or industrial purposes. This property is in essence a former agricultural site rezoned to allow development of major retail shopping complex. The amount of contamination is relatively a small portion of the overall acreage. In my view, this is not the type of site which is a priority for State financial assistance. While I must interpret the statute to effectuate the intended purpose, I must also apply it in consideration of the public interest overall and in accord with my duties as Treasurer. The financial assistance provided under the Act, which is funded through dedicated tax revenues, must be reserved for projects that clearly require State financial assistance for clean up costs for the project to be realized. This site was not included on the priority list established by the Brownfields Redevelopment Task Force; and while that is not a requirement for assistance under this program, it is nevertheless a fact that I may consider here.

The scope of our review of the action of an agency administrator is narrow. We will intervene only in those cases in which the agency action is clearly inconsistent with the law or with other State policy. George Harms v. N.J. Turnpike Auth., 137 N.J. 8, 27 (1994). This standard is generally phrased in terms of a determination of whether the agency action is arbitrary, capricious or unreasonable. Ibid. Our consideration of whether the agency action is arbitrary, capricious or unreasonable is limited to four inquiries:

(1) whether the agency's decision offends the State or Federal Constitution; (2) whether the agency's action violates express or implied legislative policies; (3) whether the record contains substantial evidence to support the findings on which the agency based its action; and (4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.

[Ibid.]

We also afford agency decisions a presumption of validity and reasonableness. We will not substitute our judgment for that of an administrative agency when the findings of the agency are supported by sufficient credible evidence in the record in its entirety. Campbell v. N.J. Racing Comm'n., 169 N.J. 579, 587 (2001). Similarly, we will defer to an agency's interpretation of a statute unless it is "plainly unreasonable."

Merin v. Maglaki, 126 N.J. 430, 437 (1992). Here, the burden is on JDN to overcome these presumptions. Bergen Pines County Hosp. v. N.J. Dep't of Human Servs., 96 N.J. 456, 477 (1984).

We have thoroughly reviewed the record and conclude that the factual findings are well-supported by the record, that the State Treasurer applied the appropriate factors to those facts, and that his interpretation of the law is reasonable. Therefore, we discern no basis for this court to disturb the decision by the State Treasurer and affirm. R. 2:11-3(e)(1)(D).

Affirmed.

 

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A-3138-05T5

 

October 16, 2006