IN RE PERMIT NO. 1512-03-0093.1 ISSUED TO TOLL BROTHERS, INC.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4264-03T54264-03T5

A-2084-04T5

IN RE PERMIT NO. 1512-03-0093.1

ISSUED TO TOLL BROTHERS, INC.

 

IN RE CAFRA PERMIT FOR TOLL

BROTHERS SEA BREEZE AT LACEY.

___________________________________

 

Argued: October 5, 2006 - Decided:

Before Judges Cuff, Winkelstein and Fuentes.

On appeal from the Department of Environmental Protection, Permit 1512-03-0093.1 (CAFRA and stream encroachment).

Carter H. Strickland, Jr., argued the cause for appellants American Littoral Society, Association of New Jersey Environmental Commissions, New Jersey Audubon Society, Pinelands Preservation Alliance, and Save Barnegat Bay (Rutgers Environmental Law Clinic, attorneys; Mr. Strickland, on the brief).

Caroline Stahl, Deputy Attorney General, argued the cause for respondent Department of Environmental Protection (Stuart Rabner, Attorney General, attorney; Michael J. Haas, Assistant Attorney General, of counsel; Ms. Stahl and Lewin J. Weyl, Deputy Attorney General, on the brief).

Marty M. Judge argued the cause for respondent Toll Brothers, Inc. (Drinker Biddle & Reath, attorneys; Mr. Judge, of counsel and on the brief; Jonathan R. Miller, on the brief).

PER CURIAM

In these consolidated appeals, several concerned environmental groups challenge two permits issued by the Department of Environmental Protection (DEP): a stream encroachment permit and a CAFRA permit issued to respondent Toll Brothers, Inc. (Toll Bros.). Appellants contend that DEP failed to provide proper notice of its consideration of the stream encroachment permit and improperly deferred consideration of critical environmental concerns to the CAFRA permit review process. Appellants also contend that the record does not contain sufficient information about several environmental issues, such as water supply and quality and endangered and threatened species, to support required findings of fact. They also argue that DEP lacked authority to approve a "land swap" to allow the applicant to meet regulatory requirements for forest preservation. We affirm.

The project that requires stream encroachment and CAFRA permits is an adult residential community comprising 580 detached single-family homes, a 100-unit apartment building, and a recreation area with a clubhouse. The project will be constructed on an undeveloped 220.36 acre parcel in Lacey Township, Ocean County. The site is surrounded by nearby developments to the south and east and undeveloped land to the north; it is bordered by the Garden State Parkway (GSP) on the west. The site contains 27.51 acres of wetlands and transition areas, leaving a net land area of 192.85 acres.

The site is in the coastal zone, within the federally designated Pinelands National Reserve, and adjacent to the smaller State-designated Pinelands Management Area. The site is primarily a partially harvested mature upland forest.

The project also implicates the adjacent property to the west of the GSP. This 223.8 acre parcel was part of the site of the proposed residential development until it was severed when the GSP was constructed in the 1950s. The west parcel is in the Pineland Area's "preservation area." It contains 35.5 acres of freshwater wetlands. The remainder of the property is partly forested and partly cleared uplands. The east and west parcels are in the watershed of Cedar Creek, a waterway that flows into Barnegat Bay.

Lacey Township granted general plan approval for the project in 2001. Pre-application meetings between Toll Bros. and DEP commenced in 2001. The record reflects that various studies were conducted throughout 2002 and 2003 in support of the required multi-permit application. On October 8, 2003, the Asbury Park Press, a newspaper of general circulation in Monmouth, Ocean and parts of Middlesex Counties, published public notice of the project. It named Toll Bros. as the applicant, described the location and features of the project, and identified the multiple permits sought by the applicant. The notice stated that Toll Bros. had submitted an application "to [DEP] for a CAFRA permit, Freshwater Statewide General Permits Nos. 6, 10A, 11, General Transition Area Waiver and a Stream Encroachment Permit" for the project. The notice mentioned a future thirty-day public comment period, the possibility of a public hearing, and the availability of the application for public review.

Toll Bros. filed its application on October 30, 2003. It explained that a stream encroachment permit was required because the project required grading and construction within the 100-year floodplain of Cedar Creek. On November 26, 2003, DEP returned the stream encroachment permit and wetlands portions of the application to the applicant due to deficiencies that included omission of a "summary table" to demonstrate compliance with the stormwater management regulations and the "water quality requirement." On December 12, 2003, another notice of the permit application was published in the Asbury Park Press. This notice was identical to the notice published in October 2003. The January 14, 2004 edition of the DEP Bulletin noted only that Toll Bros. had applied for a CAFRA permit.

On January 28, 2004, DEP issued an engineering report that addressed the project's stormwater management system. It related that the site was partially crossed by two unnamed tributaries of Cedar Creek and that the western tributary was associated with a large freshwater wetlands complex that prohibited development in that portion of the site. The engineering report approved the proposal to relocate the eastern unnamed tributary because no wetlands were implicated in that plan. The report also declared that it was satisfied that the relocation would have no water quality concerns. The engineering report also found that the proposed stormwater management system was satisfactory. In fact, the report stated that the system would actually reduce the peak runoff rate. The report contained a positive recommendation of the stream encroachment permit.

The stream encroachment permit was issued the next day. The permit recited that it reflected satisfaction only of the Flood Hazard Area Control Act Rules and contained no guarantee that the CAFRA and general permits would issue. Thus, the permit contained a condition that no construction could occur on the site until the applicant secured all requisite permits and approvals. The February 25, 2004 edition of the DEP Bulletin listed the grant of the stream encroachment permit under the name of a Flood Hazard Area permit.

The CAFRA permit application was supported by several reports regarding tree coverage, endangered and threatened species, water supply and quality, stormwater management, and traffic. As to tree coverage, the application acknowledged that Coastal Zone Management (CZM) regulations imposed a tree preservation management requirement of 25% on sites in a coastal town that had forested areas, such as Lacey Township. The minimum tree coverage required for this site is 48.21 acres. The site on which development will occur provides only 11.02 acres. Toll Bros. proposed to satisfy its tree preservation requirement by offering to deed restrict two parcels. The first is the 223.8 acre parcel to the west of the GSP. The second offered parcel is in Little Egg Harbor Township.

According to a report prepared by LGA Engineering, Inc. (LGA), the 223.8 acre parcel west of the GSP contains 188.3 acres of wooded and cleared uplands. The balance of the parcel consists of freshwater wetlands. According to N.J.A.C. 7:50-5.22: "1. Residential dwelling units in accordance with the cultural housing provisions of N.J.A.C. 7:50-5.32[;] 2. Berry agriculture and horticulture of native plants and other agricultural activities compatible with the existing soil and water conditions[;] 3. Forestry[;] 4. Beekeeping[;] 5. Fish and wildlife management[;] 6. Low intensity recreational uses, and agricultural uses. . . ." allowed on upland areas of the Pinelands are permitted uses of this property.

LGA also opined that the site can be developed in a variety of ways in accordance with the Pinelands Comprehensive Management Plan (PCMP). One hundred forty-eight and three-tenths acres of the 188.3 acres of upland can be used for cranberry or blueberry farming, and corn or grape production. The report noted, however, that this permitted agricultural use "would . . . be far more detrimental to the overall environmental preservation of threatened and endangered species habitat, which would be accomplished through the proposed deed restriction of this property for this purpose."

LGA also noted that residential development is allowed on this parcel. Although the standards for residential development are very restrictive, LGA calculated that "the site can yield between 30 and 35 residential lots."

The LGA analysis of the parcel to the west of the GSP concluded as follows:

The variety of development alternatives for the project site vary from the clear cutting of approximately 148.3-acres for blueberry farming or forestry to the subdivision of the 223-acre site for 30-35 residential lots. All of these development alternatives pose a threat to the preservation of the threatened and endangered species habitat preservation that would take place should the site be deed restricted for preservation by the State in conjunction with a development application for the adjacent property to the east of the [GSP].

Another study prepared by EcolSciences, Inc. (EcolSciences) reported that the entire western parcel "has been mapped as providing habitat for a wide suite of threatened and endangered species including wood turtle, Pine Barrens tree frog, bobcat, timber rattlesnake and Northern pine snake." In addition, the site has been mapped as habitat for "bird species of special concern," including the Barred Owl. EcolSciences opined that conversion to agricultural uses as permitted by the PCMP would be highly detrimental to the identified threatened and endangered species. Finally, it suggested that this parcel also served as a buffer between Double Trouble State Park and the GSP.

The second parcel identified by Toll Bros. to satisfy its tree preservation requirement is located in Little Egg Harbor Township, Ocean County. It contains 82.28 acres and is located in the CAFRA zone within the Coastal Environmentally Sensitive Planning Area. N.J.A.C. 7:7E-5B.2(f) describes this planning area as follows:

(f) The Coastal Environmentally Sensitive Planning Area generally has large contiguous land and water areas with critical coastal ecosystems, wildlife habitats, geological features, and other valuable coastal resources. Some of these lands have remained rural and relatively undeveloped, while others have been dominated by development for many years, such as the coastal barrier islands and spits. . . .

Four policy objectives of this planning area have been identified: 1) to "[p]rotect environmentally sensitive features by guiding development into centers and maintaining low intensity development patterns elsewhere. . . .;" 2) to "[e]ncourage transportation systems" and "support travel and tourism" and recreational activities to barrier islands; 3) to "[l]ocate economic development opportunities in centers . . .;" and 4) to "[p]rotect sensitive natural resources critical to the maintenance of coastal ecosystems by maintaining large contiguous areas of undisturbed habitat. . . ." N.J.A.C. 7:7E-5B.2(f)1-4. It is also located in the Pinelands National Reserve but outside of the State Pinelands Management Area.

The site contains extensive wetlands. Freshwater wetlands and associated transition area on the site total approximately 22 acres or 27% of the site. The site supports populations of globally rare, State-endangered plant species, one plant of special concern, and suitable habitat for several threatened and endangered animal species. The Little Egg Harbor Township site is also in close proximity to two protected natural areas. Bass River State Park abuts the site's northern boundary; the Edwin B. Forsythe National Wildlife Refuge is located less than one mile south of the site.

The Division of Fish and Wildlife stated that it did not object to the project as proposed, including the "land swap." It stated that "a land swap has been accepted by our Endangered and Nongame Species Program [ENSP] as compensation relative to tree cover loss, including intrusions into the 150' buffer established for the on-site exceptional resource value wetlands." A CAFRA Environmental Report (the Report) prepared by the DEP project manager noted the acceptance of the land swap by the ENSP. The Report also stated that the swap lots "contain a significantly larger proportion of exceptional value wetlands, forested areas and greater threatened and endangered species habitat value than the proposed project site." The report also finds that "the on-site and swap lot tree preservation meets the standards of the vegetative cover for the CAFRA area." Other agency notes relate that the proposed tree preservation plan exceeds the vegetative cover standards.

In addition to tree coverage, the CAFRA permit application addressed stream encroachment and freshwater wetlands, endangered and threatened species, stormwater management, and water quality and supply. Supported by reports and surveys from engineers and environmental consultants, Toll Bros. stated that there were certain wetlands of exceptional resource value that provided suitable habitat for the Barred Owl. DEP maintained reports of a Barred Owl sighting a couple of years before Toll Bros. filed its application. After further investigation, Toll Bros. argued that the site does not constitute documented or critical habitat for the species. It noted that another environmental consultant, who had been on the site in 1999 and 2000 in conjunction with the widening of the GSP, did not find the species on or adjacent to the site. The New Jersey Natural Heritage Database has no record of the species on the site or adjacent wetlands east of the GSP. The single recorded sighting was based on hearing the call of the species and its location was extrapolated. Furthermore, the nearest actual Barred Owl sighting was in an area west of the GSP that offers far superior habitat.

The application also addressed endangered and threatened plant species. On behalf of Toll Bros., EcolSciences identified, inspected and developed a site management plan to preserve the habitat for the Knieskern's beaked-rush population found in the southern part of an open borrow area adjacent to the GSP. LGA inspected the entire site for Swamp Pink, a rare flowering wetland plant. The species was not found on the site. The Fish and Wildlife Service of the United States Department of the Interior found that the surveys were performed in a professional manner by competent persons and accepted the findings and recommendations regarding these species. It also recommended a survey for the bog asphodel, a species under consideration for inclusion on the list of threatened or endangered species.

The Report prepared by the DEP project manager related that the federal Fish and Wildlife Service accepted the applicant's threatened and endangered species management plan and that no critical habitats had been found on site. Therefore, the Report concluded that "project implementation will not create any adverse impacts to the critical wildlife habitats."

The Report also incorporated the July 14, 2000 wetlands letter of interpretation/line verification determination that was based on a site inspection. That prior determination found that the majority of the wetlands are intermediate value wetlands that require a standard transition area of fifty feet. The Report also found that the use and density of the project was consistent with housing use rules, and water quality and stormwater management were satisfactory as found on the occasion of issuance of the stream encroachment permit. In addition, the Bureau of Air Quality determined that the proposed construction "will not significantly affect ambient air quality." The Report also found that the project will not have an adverse impact on scenic resources on or near the project site, the use of the proposed site is compatible "aesthetically and functionally" with adjacent uses, and the submitted traffic study was reviewed and no mitigation measures were required. Therefore, the project manager recommended the issuance of the requested permits, subject to a myriad of standard and specifically devised conditions.

DEP issued a CAFRA permit, Freshwater Statewide General Permits 6, 10A, and 11, General Transition Area Waiver and a Water Quality Certificate on November 4, 2004. Subsequently, DEP modified the CAFRA permit by limiting it to Phase 1, Section 1 of the project consistent with the limited approval by the Lacey Township Municipal Utilities Authority for water and sewer service.

I

Appellants American Littoral Society, Association of New Jersey Environmental Commissions, New Jersey Audubon Society, Pinelands Preservation Alliance, and Save Barnegat Bay contend that the stream encroachment permit was improperly granted. They argue that DEP improperly deferred consideration of issues other than stormwater management and water quality and supply and that the agency failure to announce the permit in its bulletin until after issuance denied them an opportunity to comment on the application. We address the stream encroachment permit issue first.

DEP issued the stream encroachment permit on findings that the stormwater management system would not increase off-site flooding, that it met or exceeded the water quality standards, and that it exceeded the water quantity standards by actually reducing the peak rate of stormwater runoff. It imposed the condition that no construction could begin until the CAFRA and freshwater wetlands permits were issued.

Newspaper notices, which named the stream encroachment permit application along with those for CAFRA and freshwater wetlands general permits, were published on October 8, 2003, and December 12, 2003. Each notice mentioned a future thirty-day public comment period. Each also mentioned the availability of the applications for review although Toll Bros. did not file them until October 30, 2003. The January 14, 2004 edition of the DEP Bulletin noted only Toll Bros.'s application for a CAFRA permit; the February 25, 2004 edition noted the grant of Toll Bros.'s stream encroachment permit application.

The stream encroachment regulations prohibit any activity that DEP "determines is likely to significantly and adversely affect the biota of the watercourse or its water quality including, but not limited to, adverse effects on potable water supplies, flooding, drainage, channel stability, threatened and endangered species of plants and animals . . . ." N.J.A.C. 7:13-3.1(b)(3). Applicants for a stream encroachment permit are accordingly required to submit an "environmental report" that describes "[t]he effect of the project" on environmental resources, including "water quality and quantity[,] . . existing and potential water uses[, and] . . . vegetation, wildlife and fisheries, including threatened and endangered species[.]" N.J.A.C. 7:13-4.1(j)(2)(i). The environmental report must include "[a] threatened and endangered animal and plant survey or habitat suitability assessment[.]" N.J.A.C. 7:13-4.1(j)(7).

However, if the area in which activity requiring a stream encroachment permit contains a documented population of an endangered or threatened plant or animal species that is "critically dependent on the watercourse to survive," if the area contains documented or suitable habitat for such a species, or if the area is near such habitat, the applicant must demonstrate that the activity will not have an adverse impact. N.J.A.C. 7:13-3.9(a). In those situations DEP "may" require a species survey that satisfies criteria similar to those for the surveys that the CAFRA regulations require when any portion of the site is documented as having an endangered or threatened plant or animal species or habitat suitable to such an animal species. Compare N.J.A.C. 7:13-3.9(b) with N.J.A.C. 7:7E-3C.2(c) and -3C.3(b).

The stream encroachment regulations relating to endangered or threatened species thus do not require an applicant to submit any information and do not require DEP to make any determination that would not also be required for issuance of a CAFRA permit. Furthermore, nothing in the Flood Hazard Area Control regulations or in the regulation allowing a multi-application, N.J.A.C. 7:7-1.8(a), prohibits DEP for purposes of reviewing a stream encroachment permit application from relying on any findings made under similarly strict standards, such as those applicable to a CAFRA permit application. Appellants do not, nor could they, argue that the stream encroachment process, including any investigations or fact-finding, is conducted more indulgently than the CAFRA review process.

The imminent implementation of stricter water quality standards does not undermine the stream encroachment permit. The CAFRA regulations require a "major development" like this project to satisfy the stormwater management regulations. N.J.A.C. 7:7E-8.7. The current version of those regulations became effective on February 2, 2004. 36 N.J.R. 670(a) (February 2, 2004); 36 N.J.R. 781(a) (February 2, 2004); see also N.J.A.C. 7:8-1.6. However, it provides that the prior rules apply if the development had received, before that date: 1) preliminary or final site plan approval or any form of subdivision approval that was not conditioned on subsequent receipt of site plan approval; and 2) a Flood Hazard Area Control permit, a freshwater wetlands permit, or a CAFRA permit, "provided that the permit included a stormwater management review component." N.J.A.C. 7:8-1.6(b)(1), -1.6(b)(2), -1.6(c). A stream-encroachment permit counts as a Flood Hazard Area Control permit because it is issued under the Flood Hazard Area Control regulations of N.J.A.C. 7:13, in particular N.J.A.C. 7:13-4.

Toll Bros.'s stream encroachment permit was issued on January 29, 2004, and the project received general development plan approval in 2001. Municipal ordinances may designate as an alternative form of subdivision or site plan approval for planned unit developments. N.J.S.A. 40:55D-39(c). The two conditions for applying the prior version of the stormwater regulations were satisfied and the stream encroachment permit is valid.

We are also satisfied that DEP properly deferred consideration of stormwater management, water quality and quantity standards to the CAFRA review process. As detailed in this opinion, the CAFRA review process was rigorous. The stream encroachment permit process requires no more than the CAFRA permit process and no regulation precludes the agency from relying on the same information for both permits. The stream encroachment permit also conferred no ability to commence the project because it was conditioned on approval of a CAFRA permit. Moreover, deferral of certain concerns, such as water quality, did not allow the project to evade full review of all relevant concerns.

We also reject appellants' argument that absence of publication in the DEP Bulletin prior to issuance deprived them of adequate notice of the application. Unlike applicants for a CAFRA permit, who must publish notice in a newspaper, N.J.A.C. 7:7-4.2(b), applicants for a stream encroachment permit only need to send notice to nearby property owners and certain municipal and county officials. N.J.A.C. 7:13-4.2(a). DEP is required to distribute its own monthly listing of "the pending applications for construction permits and the status of the review of those applications, including decisions thereon[,]" N.J.S.A. 13:1D-34, and accordingly publishes in the DEP Bulletin "a report of the receipt of each new application and each agency action on applications currently before it." N.J.A.C. 7:1C-1.6(a).

When a stream encroachment permit application is submitted, DEP has twenty days to assign it a project number and to classify it as complete for review, or to classify it as incomplete and inform the applicant of the deficiencies. N.J.A.C. 7:13-4.7(a). The classification of the application is called its "20-day status," and it is to be published in the DEP Bulletin. N.J.A.C. 7:13-4.7(b). When the application is complete, DEP has ninety days to grant approval or conditional approval, or to reject it. N.J.A.C. 7:13-4.7(d).

DEP concedes that it failed to make such publication for the stream encroachment permit application here. However, N.J.A.C. 7:1C-1.7(d) provides that the only requirements for review of a stream encroachment permit application are those of N.J.A.C. 7:13-4.7. Contrary to appellants' argument, this regulation does not require a public comment period or even refer to one. Thus, the only information that was missing from the newspaper notices that the DEP Bulletin would have provided was the application's post-filing classification as complete for review.

The cases cited by appellants about strict enforcement of all procedural regulations are distinguishable and unpersuasive. Those cases do not involve an action of a kind that the regulations otherwise allow in appropriate circumstances, such as the issuance of a permit after the applicant provided substantially the same notice that the agency should have provided. In County of Hudson v. Department of Corrections, 152 N.J. 60, 70 (1997), the agency action or inaction was a direct violation of regulations that denied the agency authority or discretion to act as it did regardless of the circumstances. See also In re Waterfront Dev. Permit No. WD88-0443-1, 244 N.J. Super. 426, 434 (App. Div. 1990) (commissioner lacked authority to issue a permit when the division empowered to issue the permit had not completed its review), certif. denied, 126 N.J. 320 (1991).

II

Appellants also claim that the CAFRA permit is supported by an insufficient factual record. They argue that the unquestioned presence on the site of habitat suitable for endangered or threatened species compelled DEP to conduct specific studies before it could conclude that the project would not have an adverse impact on the Barred Owl or other endangered and threatened species. They also contend that the DEP failed to make findings to satisfy consistency with State and federal Pinelands policies. They also argue that Toll Bros. failed to demonstrate that the project would not affect the supply of groundwater, in particular for the project as a whole, rather than only the first phase.

Appellants also contend that the permits do not satisfy three PCMP standards: 1) proof that development in a wetland or its buffer zone will not have an adverse impact; 2) proof of no feasible alternative route for a road within a wetland buffer zone; and 3) proof that the project would retain for infiltration on site the increase in stormwater runoff that it would cause with no increase in the volume or rate of stormwater discharge to any surface water body. In addition, they argue that Toll Bros. failed to show that the project satisfied the current version of the stormwater regulations, which became effective four days after DEP issued Toll Bros.'s stream encroachment permit.

Appellate review of an agency action is "severely limited." In re Musick, 143 N.J. 206, 216 (1996). An appellate court may reverse the action only if it was "clearly inconsistent with [the agency's] statutory mission or other state policy." Ibid. "'Where there is room for two opinions, [the agency] action is [valid] when exercised honestly and upon due consideration, even though it may be believed that an erroneous conclusion has been reached.'" Worthington v. Fauver, 88 N.J. 183, 204-05 (1982) (quoting Bayshore Sewerage Co. v. Dep't of Envtl. Prot., 122 N.J. Super. 184, 199 (Ch. Div. 1973), aff'd o.b., 131 N.J. Super. 37 (App. Div. 1974)).

"[T]he grant of authority to an administrative agency is to be liberally construed in order to enable the agency to accomplish its statutory responsibilities," and courts should "readily" infer that the grant encompasses "such incidental powers as are necessary to effectuate fully the legislative intent." N.J. Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 562 (1978). In addition, courts "must give great deference to an agency's interpretation and implementation of its rules enforcing the statutes for which it is responsible" unless they are "plainly at odds with the statute[s]." In re Freshwater Wetlands Prot. Act Rules, 180 N.J. 478, 488-89 (2004). An agency thus enjoys a "strong presumption" that its action was reasonable. In re Vey, 272 N.J. Super. 199, 205 (App. Div. 1993), aff'd o.b., 135 N.J. 306 (1994). The presumption is "even greater" when the action involved "specialized and technical matters" within the agency's expertise. Ibid.

Agency factual findings also enjoy a presumption of correctness as long as they are "supported by substantial credible evidence" in the record as a whole. Bd. of Educ. of Englewood Cliffs v. Bd. of Educ. of Englewood, 257 N.J. Super. 413, 456 (App. Div. 1992), aff'd o.b., 132 N.J. 327, cert. denied, 510 U.S. 991, 114 S. Ct. 547, 126 L. Ed. 2d 449 (1993). Accord Dennery v. Bd. of Educ. of Passaic Cty., 131 N.J. 626, 641 (1993); Clowes v. Terminix Int'l, 109 N.J. 575, 587 (1988). An appellate court applies these standards to avoid substituting its own judgment for the agency's exercise of expertise. In re Distrib. of Liquid Assets, 168 N.J. 1, 10 (2001); In re Authorization for Freshwater Wetlands Gen. Permits, 372 N.J. Super. 578, 593 (App. Div. 2004).

The presumptive validity of administrative actions means that "the burden of proving otherwise is on those challenging such action." Hills Dev. Co. v. Twp. of Bernards, 103 N.J. 1, 45 (1986). Accord McGowan v. N.J. State Parole Bd., 347 N.J. Super. 544, 563 (App. Div. 2002); In re Aetna Cas. & Sur. Co., 248 N.J. Super. 367, 376 (App. Div.), certif. denied, 126 N.J. 385 (1991), cert. denied, 502 U.S. 1121, 112 S. Ct. 1244, 117 L. Ed. 2d 476 (1992).

The CAFRA statutes and regulations list seven findings that DEP must make in order to issue a CAFRA permit. N.J.S.A. 13:19-10; N.J.A.C. 7:7E-1.4. "[E]ven in light of . . . DEP's broad power to regulate the coastal zone," New Jersey courts have required that DEP "specifically meet the criteria in N.J.S.A. 13:19-10 before issuing any CAFRA permit." In re Protest of Coastal Permit Program Rules, 354 N.J. Super. 293, 331 (App. Div. 2002). Accord Crema v. N.J. Dep't of Envtl. Prot., 182 N.J. Super. 445, 453 (App. Div. 1982), aff'd as mod. on other grounds, 94 N.J. 286 (1983).

DEP has accordingly grouped the required CAFRA findings into three categories: the "location rules" of N.J.A.C. 7:7E-2 through -6, the "use rules" of N.J.A.C. 7:7E-7, and the "resource rules" of N.J.A.C. 7:7E-8. N.J.A.C. 7:7E-1.1(d). The Code also states that it "does not, however, expect each proposed use of coastal resources to involve all location rules, use rules, and resource rules. Rather, the applicable rules are expected to vary from proposal to proposal." N.J.A.C. 7:7E-1.1(d).

Appellants claim here that DEP failed to make four of the required findings, namely, that the project: 1) "[c]onforms with . . . all applicable water quality criteria[,]" N.J.S.A. 13:19-10(a); 2) "[p]revents . . . water effluents in excess of the existing dilution, assimilative, and recovery capacities of the . . . water environments at the site and within the surrounding region[,]" N.J.S.A. 13:19-10(b); 3) "[w]ould result in minimal feasible impairment of the regenerative capacity of water aquifers or other ground or surface water supplies[,]" N.J.S.A. 13:19-10(d); and 4) "[w]ould cause minimal feasible interference with the natural functioning of plant, animal, fish, and human life processes at the site and within the surrounding region[,]" N.J.S.A. 13:19-10(e).

DEP found that Toll Bros. had demonstrated the absence of Swamp Pink or habitat for it on site, that Toll Bros. had presented an acceptable management plan for Knieskern's beaked-rush, and that the site contained no "critical habitats" for wildlife. It also found that the applicant demonstrated an adequate water supply for the first phase of the project without causing a significant impact on groundwater, and DEP modified the CAFRA permit to add the condition that Toll Bros. demonstrate a sufficient water supply before starting any subsequent phase.

In addition, DEP implicitly found that the application was consistent with the PCMP. Notably, the Pinelands Commission deferred the PCMP compliance decision to DEP. Finally, the stream encroachment permit was issued based on the stormwater management regulations applicable at the time of issuance. In issuing that permit, the agency found that the stormwater management system would improve peak runoff rates.

A. Endangered and Threatened Species

The regulations define habitat for endangered or threatened species, whether plant or wildlife, as "areas known to be inhabited" by such species on a permanent or seasonal basis, or in the alternative, as areas known "to be critical at any stage in the life cycle of any" such species. N.J.A.C. 7:7E-3.38(a). If the habitat is surrounded by "a sufficient buffer area to ensure continued survival of the population of the species[,]" it is deemed part of the habitat. Ibid. This regulation prohibits development in such habitat unless the applicant demonstrates that it "would not directly or through secondary impacts on the relevant site or in the surrounding area be adversely affected." N.J.S.A. 7:7E-3.38(b). For plant species, it allows the applicant to demonstrate the absence of adverse impacts "by conducting an Endangered or Threatened Wildlife Species Impact Assessment in accordance with N.J.A.C. 7:7E-3C.2." N.J.A.C. 7:7E-3.38(c)(1), -3C.2(b). However, those requirements only apply if an endangered or threatened plant species actually "has been documented to be on the site or a portion of the site" or in an abutting area. N.J.A.C. 7:7E-3C.2(b).

If endangered or threatened plant species are actually present, the impact assessment must address certain factors, with no prescription of methodology other than that it follow "accepted" scientific principles. N.J.A.C. 7:7E-3C.2(c).

For animal species, the regulations allow the applicant to "[d]emonstrate that the proposed site is not endangered or threatened wildlife species habitat" by "conducting an Endangered or Threatened Wildlife Species Habitat Evaluation in accordance with N.J.A.C. 7:7E-3C.3" for each such species. N.J.A.C. 7:7E-3.38(c)(2), -3C.3(a). Those regulations apply whenever the designation of a particular site as containing habitat for such species is in dispute. N.J.A.C. 7:7E-3C.3(a).

The evaluations must "[u]se scientific methodology appropriate for each species[.]" N.J.A.C. 7:7E-3C.3(b)(1). They must also "[e]xamine specific attributes and characteristics of the site that limit or eliminate its suitability as habitat," which include without limitation "vegetative cover, soils, hydrology, existing land use and any other factors that are used to determine suitability of a site for the species." N.J.A.C. 7:7E-3C.3(b)(2). The regulation specifies that the "vegetative analysis shall include an on-site investigation and evaluation[.]" Ibid.

Here, the October 25, 2002 EcolSciences report on the Barred Owl used a field investigation to determine the nature of the site's vegetative cover. It also relied on scientific literature that it referenced to conclude that the nature of the vegetative cover and the degree of "edge" at the site due to the existing surrounding development made the site unsuitable for the species, and actually favored a predator, the Great Horned Owl. EcolSciences did not address the site's soils or hydrology, but appellants provide no indication that a soils analysis would have been relevant to a determination of habitat suitability for the Barred Owl.

Furthermore, the application indicated that there would be no disturbance to the wetlands that had been classified as having exceptional resource value due to their proximity to the off-site sighting of a Barred Owl. We must recall that Toll Bros. was seeking only freshwater general permits, a permit DEP could not even consider issuing for a wetland of exceptional resource value. N.J.S.A. 13:19B-23(b). The information supplied by the applicant was sufficient for a finding that the project would not affect any area on the site that the Barred Owl was known to inhabit on a permanent or seasonal basis, or any area that the species was known to use for a function that was critical at some stage in its life cycle. The information was also provided substantially in the form that the regulations required. Notably, the agency concluded that the survey was conducted by competent personnel in a scientifically acceptable manner. The record, therefore, provided an adequate basis to find that the project would not adversely impact Barred Owl habitat.

As for the Pine Barrens tree frog, DEP's own report of January 30, 2004, declared that the species had not been "recorded" on site, although it had been recorded in the surrounding area. The only record to the contrary was a 1975 sighting, which appellants do not contend is sufficiently recent to require consideration. There was accordingly no dispute between DEP and the applicant about the absence of habitat for that endangered or threatened animal species on site, and no evidence to the contrary that appellants cite. Therefore, DEP did not err when it failed to make the applicant submit an evaluation of the kind that is only required to refute DEP's designation of a site as containing known habitat.

The record also contains an extensive discussion of endangered and threatened plant species. A survey for Swamp Pink was undertaken and none was found. Relevant agencies opined that the survey was performed in a professionally acceptable manner by competent personnel.

An endangered plant species known as Knieskern's beaked-rush was identified on the site. The management plan proposed by the applicant was accepted by DEP but only after satisfaction of the agency concerns. Notably, the permit issued by DEP contains a site specific condition of a conservation restriction for the area where this plant species was found.

B. Water Supply

As noted above, a developer must show that its project "[w]ould result in minimal feasible impairment of the regenerative capacity of water aquifers or other ground or surface water supplies." N.J.S.A. 13:19-10(d). The regulations do not require a project to have zero net impact on groundwater supply, but rather that it will not significantly decrease the supply. N.J.A.C. 7:7E-8.6(b).

Appellants contend that the segmented approval granted by the agency is contrary to the governing regulations and case law barring issuance of a permit based on a concept. DEP and Toll Bros. argue that the purposes of that regulation are equally well served by the separate regime in N.J.A.C. 7:19, under which DEP protects the supply and quality of groundwater by requiring water supply allocation permits for persons or entities, including municipal water authorities, with "the capability to divert, or claiming the right to divert more than 100,000 gallons of" groundwater per day from any combination of sources. N.J.A.C. 7:19-1.4(a). That regime requires the Lacey Township Municipal Utilities Authority to apply for a "major modification" of its permit before "any increase in the amount of consumptive use of 10 percent or greater." N.J.A.C. 7:19-1.5(a)(1). Appellants respond that the CAFRA regulations in general require findings that an "application," meaning the entire project rather than each phase in sequence, satisfies all the applicable standards, with anything short of that amounting to a "conceptual review" that our courts have prohibited for CAFRA applications.

The prohibition of conceptual review of a CAFRA application was declared unacceptable in Crema, supra, 182 N.J. Super. 445, in which a developer proposed "a 700-room hotel, 6,850 living units, 860,000 square feet of commercial office space, and the eventual introduction of a population of 20,000 people." Id. at 448. This court reversed DEP approval of a concept plan. We explained that CAFRA permitted conditional construction permits, but only upon a record sufficient to support "the [DEP]'s finding that the statutory criteria had been basically satisfied[.]" Id. at 451. By contrast, conceptual approval "is of so indefinite a nature that it is impossible to foretell what inferences may be drawn therefrom when further permit applications are made." Id. at 452. In other words, a conceptual approval may subsequently be mistakenly construed within the agency as having involved "at least a partial weighing of statutory criteria" when no weighing occurred at all, with the result that the agency will give the subsequent applications for the project an inadequate, if not truncated, review. Ibid.

Here, there was a sufficient record on which DEP could find that the project as a whole "basically satisfied" the statutory criteria and the regulations. Id. at 451. Indeed, all of the supporting documentation addressed the project as a whole. The only exception was the issue of water supply. The local water authority certified sufficient capacity for the first phase of the project, and no work beyond the first phase of the project is allowed until certification of the availability of adequate water supply for the balance of the project. This approach represents an appropriate exercise of DEP's discretion in applying the CZM rules, N.J.A.C. 7:7E-1.5(a), rather than an impermissible "conceptual approval."

C. Consistency with the PCMP

Development in the CAFRA zone "shall be consistent with the intent, policies and objectives" of federal and State Pinelands legislation. N.J.A.C. 7:7E-3.44(b). For wetlands and their 300-foot transition areas, the PCMP prevents development in a wetland or within its 300-foot buffer zone if it would result in a "significant adverse impact." N.J.A.C. 7:50-6.6, -6.7, -6.14. That requirement is similar to the freshwater wetlands standard that general permits are limited to activities that "cause only minimal adverse environmental impacts when performed separately" or cumulatively "and will cause only minor impacts on freshwater wetlands[.]" N.J.A.C. 7:7A-4.1(b)(1). The PCMP and freshwater wetlands standards are consistent, notwithstanding appellants' suggestion to the contrary, and the similarity explains the Pinelands Commission's decision to defer to DEP's findings on whether the application satisfied that environmental concern. While appellants imply that PCMP's wetland rules would have avoided an adverse impact on critical habitat, the record instead showed the absence of such habitat for wildlife and an adequate management plan for the one plant species of concern.

The standards for roads in wetlands are also consistent. The PCMP permits roads in a wetland if there is "no feasible alternative route" that would result in "less significant adverse impacts on wetlands," and if "all practical measures to mitigate the adverse impact" are taken. N.J.A.C. 7:50-6.13(a)(1), (4). However, for roads in a wetlands transition area, the PCMP requires only the avoidance of significant adverse impact. N.J.A.C. 7:50-6.14. The record here demonstrates that the project and its associated disturbance of wetlands will not have a significant adverse impact on wetlands.

Appellants' final contention that the permit is inconsistent with PCMP stormwater runoff requirements is without merit. The record fully supports DEP's finding that the project would actually reduce the peak stormwater runoff rate, and there is no support for appellants' complaint that "the project will discharge stormwater directly to [a] tributary to Cedar Creek" because the stormwater outfall structures would not be located in either tributary.

Accordingly, we hold that DEP acted within the authority bestowed on it and based its decision on ample findings of fact found in this record.

IV

In order to obtain a CAFRA permit, the project must be designed to meet a 25% tree preservation requirement. Thus, for this site, the mandatory site tree coverage is 48.21 acres. As designed, the eastern parcel on which development will occur allows preservation of only 11.02 acres. The applicant, therefore, initially proposed amalgamation of the eastern and western parcels and then a land swap consisting of the western parcel and the Little Egg Harbor Township parcel to satisfy the tree preservation requirement. Although, DEP initially rejected this proposal, DEP appears to have amalgamated the eastern and western parcels at the time of final review and approved the permit.

Appellants claim that DEP erred by allowing Toll Bros. to use off-site properties to satisfy the requirement for preserving forest coverage on the site itself. They argue that no statute or regulation provides for such a "land swap," let alone standards for engaging in one, and that the practice undermines the policy of preserving the environmental resources of each site within the coastal zone and the zone as a whole. Alternatively, if this land swap is viewed as the aggregation of property into one site, as was apparently done in this permit, appellants claim that neither legal authority nor common sense allows DEP to treat the 223.8-acre lot west of the GSP as eligible for aggregation due to the physical barrier of the highway.

Appellants also argue that, even if the western parcel and the Little Egg Harbor Township parcel are considered as off-site mitigation rather than a land swap, the regulations require off-site mitigation to occur on a parcel that is "similar in type and location" to the site, unless mitigation on a dissimilar property will make a "major contribution" to basic coastal policies. They contend that DEP did not make the requisite findings and the record does not allow a finding that the Little Egg Harbor Township parcel is similar in type and location to the site, and that it fosters a major contribution to coastal policies because the Little Egg Harbor Township parcel and the western parcel are virtually immune from development as a practical matter due to their high resource value.

A project involving the construction of multiple new residences is a "development" for CAFRA purposes, N.J.S.A. 13:19-3; N.J.A.C. 7:7-1.3; N.J.A.C. 7:7E-1.8(a), and the project here requires a CAFRA permit because it involves twenty-five or more residential units. N.J.S.A. 13:19-5(e)(1). DEP exercises its CAFRA authority by issuing and enforcing permits pursuant to the general Coastal Permit Program regulations in N.J.A.C. 7:7-1.1 to -10.6 and the CZM regulations in N.J.A.C. 7:7E-1.1 to -8.22. Raleigh Ave. Beach Ass'n v. Atlantis Beach Club, 185 N.J. 40, 61 (2005).

The CZM regulations identify consistency and predictability as goals, but they also provide that DEP action may reflect "professional judgment by the Department officials" as long as it does not amount to "arbitrary decision-making or unrestrained administrative discretion." N.J.A.C. 7:7E-1.5(a). The basic policies guiding "the application of administrative discretion" include DEP's responsibility to "[p]rotect and enhance the coastal ecosystem" and "[c]oncentrate rather than disperse the pattern of coastal residential, commercial, industrial, and resort development, encourage the preservation of open space, and ensure the availability of suitable waterfront areas for water dependent activities." N.J.A.C. 7:7E-1.5(a)(1)(i), (ii).

The regulations define "site" as "the lot or lots upon which a proposed development is to be constructed." N.J.A.C. 7:7-1.3, 7:7E-1.8(a). In applying the regulations to a site, DEP is to consider the "[p]roperty as a whole," which means "all property assembled as one investment or to further one development plan[,]" regardless of the number of lots involved. N.J.A.C. 7:7-1.3. Those definitions do not specify that the lots on which the "regulated activity" will occur must be contiguous, nor does the freshwater wetlands regulation that appellants reference by analogy, N.J.A.C. 7:7A-1.4.

Notably, the CAFRA and general permits issued by the agency seem to aggregate the parcel to the east of the GSP in which development will occur and the parcel to the west of the GSP. Certainly, the Report, the decision document that serves as the foundation document for the permit, describes the proposed site as "two parcels (Block 1901, Lot 18 and Block 2500, Lot 1) and contains 220.36 acres and 223.8 acres respectively in the Township of Lacey. The site is located by the [GSP]." This description includes the parcels on the east and west sides of the GSP.

The record demonstrates that prior to construction of the GSP, the parcels were in single ownership and were treated as a single parcel. Furthermore, Toll Bros. owned the severed parcels at the time of submission of the permit application. The parcel to the west of the GSP may be considered contiguous with the eastern parcel even though a highway runs along the border of each parcel. DEP regulations that define "contiguous" do not exclude properties separated by roadways. For example, contiguous even under the freshwater wetlands regulations define properties as contiguous "even if they are separated by human-made barriers or structures," with no suggestion of a size limit, and sets forth examples that "include, but are not limited to[,] land areas which directly abut or are separated by a general access roadway[.]" N.J.A.C. 7:7A-1.4. In other contexts, properties separated by roadways may also be considered contiguous. See Hous. Auth. of Newark v. Norfolk Realty Co., 71 N.J. 314, 322 (1976) (in the context of the calculation of compensation in the event of a taking, a property owner may receive severance damages for a non-contiguous parcel if the owner can demonstrate functional unity); Twp. of Manalapan v. Genovese, 187 N.J. Super. 516, 521 (App. Div. 1983) (same).

We acknowledge that the applicant's initial efforts to amalgamate the two parcels was rejected by the agency. We do not consider that initial rejection as immutable as it appears that no regulation bars the amalgamation of both parcels.

For a forested site in a CAFRA town, like the site here, the required "tree preservation percentage" is 25% of the aggregate area of the forested portions. N.J.A.C. 7:7E-5B.5(a)(1)(iii), -5B.5(c)(2). That percentage is used to calculate the amount in acres of the area "in which trees . . . shall be planted or preserved[.]" N.J.A.C. 7:7E-5B.5(a)(1). The regulation also provides that "[t]he requirement for tree planting at (a)1 can be satisfied by preserving equivalent forested areas in addition to that required under (a)1 above." N.J.A.C. 7:7E-5B.5(c)(1). There is no requirement to plant new trees when there is enough existing tree coverage to satisfy the preservation percentage. Applicants have the alternative of "preserving equivalent forested areas," which they can only find off-site. Ibid. We have found no authority that the "in addition" language means that applicants must preserve twice the acreage of existing off-site forest as they would need to preserve on site to satisfy the coverage percentage. Ibid.

N.J.A.C. 7:7E-5B.5(a)(l)(iii) and -5B.5(c)(2) provide that the 25% tree preservation requirement is calculated on gross acreage less wetlands acreage. The west lot contains 188.3 acres of partly cleared and partly forested uplands. The record also reflects that 148.3 acres of this parcel would have to be cut for either agricultural or forestry uses. The combination of the 11 acres of tree preservation on the east parcel and the preserved forested upland of the west parcel appears to amply satisfy the applicant's tree preservation requirement.

Viewed as off-site mitigation, the record supports a finding that preservation of both parcels achieves the requirement for this device. The general principles in the CAFRA regulations governing mitigation are that it must be performed in kind and on land within the project's watershed, if it is to be considered a valid way of preserving the particular resource value in question:

Mitigation shall be selectively considered on a case-by-case basis as compensation for the loss or degradation of a particular natural resource. In general, mitigation should be similar in type and location to the resource disturbed or destroyed, that is, replacement in kind within the same watershed. The Department will, however, consider proposals for mitigation that differ in type and/or location from the disturbed or destroyed resource provided the mitigation will provide a major contribution to meeting the basic coastal policies. . . .

[N.J.A.C. 7:7E-1.6(a).]

The regulations also prescribe requirements for mitigation of a particular resource in Special Area rules. N.J.A.C. 7:7E-3.1 through -3.49. Forested upland is not specifically denominated a "special area" subject to special rules.

The stated "[r]ationale" of the regulation is that suitable mitigation will preserve "those physical and biological values described under applicable Special Area rules" by ensuring either a "real gain, or no net loss[,] of habitat productivity or resource value[,]" while allowing a development that is otherwise consistent with CAFRA standards to proceed. N.J.A.C. 7:7E-1.6(b). For that reason, DEP may allow mitigation that is not of the same kind or within the same watershed only upon a showing that it would "provide a major contribution" towards the basic coastal policies named in N.J.A.C. 7:7E-1.5(a)(1). N.J.A.C. 7:7E-1.6(a).

In this case, the proposed mitigation was "similar in type" because the reduction in tree coverage on the site was being mitigated by the tree coverage on both lots. The west parcel is plainly similar in location and is in the same watershed. The second parcel is not similar in location to the site because it is located three townships to the south, and Toll Bros. implicitly concedes that it is not in the same watershed as the site, though both are in the Barnegat Bay Watershed Management Area. On the other hand, the Report issued contemporaneously with the CAFRA permit described the second lot as having a far greater resource value than the site and of particular value due to its proximity to a State forest and a national wildlife refuge.

The record contains considerable information regarding the resource values of both parcels and the development potential of the west parcel. By receiving title to the west parcel, the State acquires a clear tangible benefit because transfer of title precludes any agricultural, forestry or residential use, all of which are permitted uses, of this parcel. Admittedly, the record contains little about the development potential of the second parcel other than its placement in the Coastal Environmentally Sensitive zone. The regulations contemplate low intensity development of such parcels. Notably, development is not prohibited, nor could it be unless the State or the municipality was prepared to acquire the property for just compensation. N.J.S.A. 13:9B-22. Here, too, the transfer of title of this parcel to the State assures that even the most minimal development will not occur on this high resource value parcel. Thus, we must conclude that the State has received a tangible benefit by accepting title to this parcel in mitigation of the tree coverage loss on the project site.

 
In summary, we hold that issuance of the stream encroachment and CAFRA permits are well-supported by the record and conform to governing law. We, therefore, affirm the decision of the agency to issue both permits.

Affirmed.

Coastal Area Facility Review Act, N.J.S.A. 13:19-1 to -21.

Toll Bros. also applied for and was granted several general permits to perform work in delineated wetlands on the project site. The general permits that involved a disturbance of .0438 acres of wetlands and 2.126 acres of transition area disturbance are not challenged in this appeal.

The permit as issued requires Toll Bros. to transfer title to both parcels.

We reject Toll Bros.'s contention that appellants lack standing to prosecute these appeals. As associations concerned with the preservation of coastal resources, they have sufficient interest in the issues presented in this appeal. SMB Assocs. v. N.J. Dep't of Envtl. Prot., 137 N.J. 58, 61-62 (1994).

(c) The preservation or planting of trees and/or herb/shrub vegetation areas shall comply with the vegetative cover requirements at N.J.A.C. 7:7E-5.4.

1. The requirement for tree planting at (a)1 above can be satisfied by preserving equivalent forested areas in addition to that required under (a)1 above.

(continued)

(continued)

43

A-4264-03T5

May 10, 2007