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PLANNING SPRING CONSTRUCTION? TAKE STOCK OF YOUR DEVELOPMENT APPROVALS TO SEE IF YOUR PROJECT IS SHOVEL READY

3/27/2013

Are Your Project Approvals Extended?

Perhaps it’s a sign of the long-awaited economic recovery.  Maybe your project has been on hold while you have been laboring through years of complex environmental cleanup, or you have been unable to secure financing for your facility expansion.  But now, finally, you are ready to start construction. You may be interested in acquiring a property for development, or you just want to have the peace of mind that your project is “shovel ready” when the time is right.  Whatever the reason, it is critical that you understand the benefits of the Permit Extension Act – what it covers, and perhaps more importantly, what it doesn’t.

Since adopting the Permit Extension Act of 2008, the State of New Jersey has twice acted to further suspend the expiration of development approvals.  The Act extends a broad array of state, county and municipal approvals.  The concept is simple.  Because the process of obtaining and renewing development permits is costly and time consuming, the Permit Extension Act allows the automatic extension of myriad approvals to facilitate much needed construction on projects that have been delayed due the national recession and the mortgage finance crisis.

How Long Does This Extension Last?

The most recent enactment extends approvals - or more precisely suspends the running of the period of approval – until December 31, 2014.  Depending upon the original expiration date of the approval, the extension may run to as far as June 30, 2015.

Because extensions otherwise allowed by law can in some instances be piggybacked onto the Permit Extension Act, it is possible that approvals can be extended even beyond these dates.  Preliminary and/or final site plan approvals, for example, might be further extended under the Municipal Land Use Law if the statutory criteria are met.

What Permits are Covered?

Since the mechanism of permit extension by legislative action was first employed in response to an earlier economic downturn in 1992, and now most recently revived in 2008 to combat the Great Recession, the list of approvals that are covered has grown lengthier and more complicated, as have the carve-outs.  Some examples:

• Properties within “Environmentally Sensitive Areas” have from the beginning been excluded from extension.
• Regional planning areas such as the Pinelands, Meadowlands and Highlands have special characteristics that warrant exclusion of certain districts.
• A new definition of “Extension Areas”, adopted in the 2012 amendments to the Permit Extension Act, applies the extension to certain designated growth areas within these regional planning areas, as well as urban enterprise zones and areas determined to be in need of redevelopment.
• Agreements for use or reservation of sewer capacity are now extended under the most recent amendments.
• NJDEP Flood Hazard Area approvals may only be extended if work has commenced.
• Federal permits for wetlands, bulkheads, piers, etc. have never been subject to extension by the state legislation, of course.

So, whether all of your required project approvals have been extended under the Permit Extension Act, and for how long, may not be a simple yes or no answer.  Regardless of whether start of construction on your project is imminent, or is still up in the air, you should carefully analyze all of your approvals to confirm that your project is both financeable and buildable when you are ready to put a shovel in the ground.

For more information, please feel free to contact Tom O’Connor at toconnor@lawwmm.com, or by phone at 201-330-7466.