April 30, 2010

The New Jersey Department of Environmental Protection (DEP) has adopted comprehensive new Remediation Standards which took effect on June 2, 2008. N.J.A.C. 7:26D. They establish many new soil cleanup standards controlling residential and non-residential uses of property, including stringent new cleanup levels for some contaminants that are lower than the old standards by an order-of-magnitude or more. At least three of these contaminants are often detected at sites in New Jersey: chloroform, naphthalene and 4-methylphenol.

There is some good news and bad news here for brownfield redevelopment projects. The good news is that DEP has adopted a “grandfathering” provision exempting qualifying persons from compliance with certain new cleanup standards. The bad news is that even these persons receive only limited grandfathering protection. Under the grandfathering provision, DEP’s new cleanup standards will affect cleanup and development projects in these ways:

•  If you have an innocent purchaser defense to cleanup liability under the Spill Act and you received an NFA letter before June 2, 2008, you’re in the clear– you are excused from complying with DEP’s new cleanup standards (for the matters covered by the NFA letter).
• If you have an innocent purchaser defense to cleanup liability under the Spill Act and you submit an approvable Remedial Action Workplan (RAWP) or Remedial Action Report (RAR) to DEP during a six-month phase-in period (before December 2, 2008), you still must comply with all new cleanup standards that lower contaminant levels requiring cleanup by an order-of-magnitude or more, but you are excused from complying with all other, less stringent new cleanup standards.
•  After June 2, 2008, all other persons engaged in cleanup activities at New Jersey sites must comply with all of DEP’s new cleanup standards.

In other words, where DEP’s new cleanup standards for a contaminant are at least an order-of-magnitude lower than its old cleanup standards (i.e. one-tenth of the prior cleanup levels), there is no grandfathering protection for anyone engaging in cleanup activities after June 2, 2008.

Interested parties, including property owners, purchasers, developers, lenders and insurers, must evaluate the impact of DEP’s new Remediation Standards on brownfield or other cleanup and redevelopment projects they may be considering or implementing. They should pay close attention to DEP’s six-month phase-in provision and the major limitation on grandfathering protection created by DEP’s order-of-magnitude “re-opener” for all active sites. Where appropriate, they should consult with professional consultants and attorneys who are familiar with DEP’s old and new cleanup standards, the Spill Act’s innocent purchaser defenses, and the legal protections provided by NFA letters. Given the approaching December 2, 2008 deadline to qualify for any grandfathering protection, interested persons should act now to assess the impact of the DEP’s comprehensive new cleanup regulations on their development plans or projects.

Click here to read the article in the New Jersey Builders Association's Newsletter, Dimensions

Click here to read the Spill Act article in the New Jersey Builders Association's Newsletter, Dimensions

This article provides information of general interest and is not intended, and should not be used, as a substitute for consultation with legal counsel. Please do not hesitate to contact Nielsen V. Lewis, Esq., the author and partner–in charge of the Environmental Practice Group of Hill Wallack LLP, by telephone at (609) 734-6308 or email at nvl@hillwallack.com, to discuss this Client Alert or how we can help you assess the impact of DEP’s new site cleanup rules on any land development projects you may have or be considering.