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Lesser v. City of Cape May

September 1, 2000

FRANCES D. LESSER, GEORGE LESSER, BARBARA SKINNER, JANET SKINNER, BRUCE MINNIX, CORINNE MINNIX, FRED WILSON, ALICE STEER WILSON, MARTIN PYLE, AND HANNAH PYLE,
PLAINTIFFS,
V.
THE CITY OF CAPE MAY, IN ITS CAPACITY AS DESIGNEE OF THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, THE HONORABLE WILLIAM G. GAFFNEY, AS MAYOR OF THE CITY OF CAPE MAY, CATHY BUFORD SLATER, AS CHAIRPERSON OF THE ADVISORY COUNCIL ON HISTORIC PRESERVATION, AN INDEPENDENT AGENCY OF THE: UNITED STATES OF AMERICA, ADVISORY COUNCIL ON HISTORIC PRESERVATION, AN INDEPENDENT AGENCY OF THE UNITED STATES: OF AMERICA, ROBERT C. SHINN, JR., IN HIS: OFFICIAL CAPACITY AS THE NEW JERSEY STATE: HISTORIC PRESERVATION OFFICER, AND CONGRESS HALL PARTNERS, LLC,
DEFENDANTS.



The opinion of the court was delivered by: Joel A. Pisano, District Judge

FOR PUBLICATION

OPINION

INTRODUCTION

As the largest nineteenth century beach-front hotel remaining in the City of Cape May ("City" or "Cape May"), New Jersey, the Congress Hall Hotel ("Hotel") is a National Historic Landmark. Congress Hall Partners, LLC ("CHP"), the current owner of the Hotel, seeks to restore the Hotel and to construct a new conference center adjacent to the existing structure. Plaintiffs, a group of ten Cape May residents, challenge the proposed rehabilitation on the ground that certain statutory procedural requirements, which must precede any federally funded historic rehabilitation project, have not been satisfied. Plaintiffs allege violations of the National Historic Preservation Act of 1966 ("NHPA"), 16 U.S.C. § 470 et seq., and the National Environmental Policy Act of 1969 ("NEPA"), 42 U.S.C. § 4321 et seq., and seek judicial review of those alleged violations pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq. On November 30, 1999, plaintiffs filed a seven-count complaint seeking declaratory and injunctive relief. *fn1 The Court has subject matter jurisdiction pursuant to 5 U.S.C. § 702, 28 U.S.C. § 1331, and 28 U.S.C. § 1361.

Pending before the Court are the following motions: (1) a motion to dismiss for failure to state a claim, or in the alternative, for summary judgment filed by defendant CHP; (2) a motion to dismiss for failure to state a claim, or in the alternative, for summary judgment filed by defendants Advisory Council on Historic Preservation ("Advisory Council") and Cathy Buford Slater; *fn2 (3) a motion to dismiss for failure to state a claim, or in the alternative, for summary judgment filed by defendants Cape May and Mayor William G. Gaffney ("Mayor Gaffney"); *fn3 (4) a motion to dismiss for failure to state a claim, or in the alternative, for summary judgment filed by defendant Robert C. Shinn, Jr.; *fn4 (5) a cross-motion for summary judgment filed by plaintiffs; and (6) a motion for leave to file a second amended complaint filed by plaintiffs. All of the motions have been opposed. On April 7, 2000, the Court heard oral arguments. *fn5

In the amended complaint, plaintiffs allege the following causes of action arising from the NHPA and the NEPA project review process: (1) that defendants arbitrarily and capriciously concluded that 202 parking spaces are permitted on the Hotel premises (Count One); (2) that defendants arbitrarily and capriciously decided to have the project governed by a Programmatic Agreement ("PA") rather than a Memorandum of Agreement ("MOA") (Count Two); (3) that the City arbitrarily and capriciously decided to bifurcate the project, thereby limiting the consideration of environmental effects to Phase I, the rehabilitation phase, and not reviewing Phase II, the new construction phase (Count Three); (4) that defendants failed to take into account the adverse effects of the project and failed to mitigate the potential harm of those effects (Count Four); (5) that the City failed to document adequately its determination that the project would have no adverse effects, and never considered feasible alternatives to the project (Count Five); and (6) that the City abrogated its duty to conduct an independent environmental review by relying on reports prepared by outside consultants (Count Six). *fn6

Plaintiffs also seek leave to file a second amended complaint to assert an eighth claim which alleges that the improper decision to bifurcate the project resulted in an arbitrary and capricious determination that the rehabilitation phase qualified for a categorical exclusion from the requirement that an environmental impact statement ("EIS") be prepared.

In their motions, defendants argue that there are no substantive requirements of the NHPA and the NEPA, only procedural ones, and they have been satisfied. Defendants also contend that the discretionary decisions to use a PA, to bifurcate the project, and to rely on reports drafted by outside environmental consultants, are entitled to judicial deference because they were neither arbitrary nor capricious.

Having reviewed the numerous submissions from the parties, applicable case law, statutes and administrative regulations, *fn7 the Court agrees with defendants and finds no genuine issues of material fact and no merit to any claim asserted by plaintiffs. Accordingly, the Court grants defendants' motions for summary judgment, *fn8 and denies plaintiffs' cross-motion for summary judgment. The Court also denies plaintiffs' motion for leave to file a second amended complaint because there is no basis to sustain the proposed Count Eight. The Court's rejection of Count Three necessarily makes the proposed amendment futile.

Although the Court rejects plaintiffs' challenges, the Court recognizes the legitimate concerns that plaintiffs have voiced persistently throughout the administrative agency review process and during the course of this litigation. The Court is mindful of the competing interests at play here, which the NHPA and the NEPA seek to balance. See 16 U.S.C. § 470-1; 42 U.S.C. § 4332. Simply put, the economic interests of CHP, the project developer, are pitted against the historic and environmental preservation interests that plaintiffs have raised on behalf of themselves and the public. With respect to the public interests, the Court recognizes the unique features of Cape May, including its shoreline and rich history, which are important factors that warrant consideration. The Court is convinced that all interests were given due consideration during the NHPA and NEPA reviews, and that the outcome is adequately supported by the administrative record.

STATUTORY BACKGROUND

I. The NHPA

By enacting the NHPA, Congress empowered the federal government to play a more active, yet limited, role in preserving, restoring and maintaining the historic and cultural foundations of the nation. See 16 U.S.C. § 470; Exec. Order No. 11,593, 36 Fed. Reg. 8,921 (1971). This role is satisfied, in part, if the federal government "foster[s] conditions under which our modern society and our prehistoric and historic resources can exist in productive harmony and fulfill the social, economic, and other requirements of present and future generations . . . . " 16 U.S.C. § 470-1(1). The NHPA created the Advisory Council, an independent federal agency, whose function, among others, is to "review the policies and programs of Federal agencies and recommend to such agencies methods to improve the effectiveness, coordination, and consistency of those policies and programs with the policies and programs carried out under [the NHPA]." 16 U.S.C. § 470j(a)(6).

The function of the Advisory Council in relation to a federal agency that is reviewing an undertaking *fn9 is as follows:

The head of any Federal agency having direct or indirect jurisdiction over a proposed Federal or federally assisted undertaking in any State and the head of any Federal department or independent agency having authority to license any undertaking shall, prior to the approval of the expenditure of any Federal funds on the undertaking or prior to the issuance of any license, as the case may be, take into account the effect of the undertaking on any district, site, building, structure, or object that is included in or eligible for inclusion in the National Register. The head of any such Federal agency shall afford the Advisory Council on Historic Preservation established under sections 470i to 470v of this title a reasonable opportunity to comment with regard to such undertaking. [16 U.S.C. § 470f ("Section 106").]

When an undertaking may negatively affect a National Historic Landmark, the following additional requirement is mandated during the NHPA review process:

Prior to the approval of any Federal undertaking which may directly and adversely affect any National Historic Landmark, the head of the responsible Federal agency shall, to the maximum extent possible, undertake such planning and actions as may be necessary to minimize harm to such landmark, and shall afford the Advisory Council on Historic Preservation a reasonable opportunity to comment on the undertaking. [16 U.S.C. § 470h-2(f) ("Section 110(f)").]

The Advisory Council, as its name suggests, advises the reviewing federal agency on relevant historic considerations, but it does not dictate the outcome of the review process. See Concerned Citizens Alliance, Inc. v. Slater, 176 F.3d 686, 695-96 (3rd Cir. 1999) (stating that the Advisory Council's comments during the NHPA review process are only advisory because Section 106 is merely a "stop, look, and listen" provision). Pursuant to 16 U.S.C. § 470s, the Advisory Council promulgates administrative regulations to govern the implementation of the review process. See 36 C.F.R. §§ 800.1- 800.16 (1999).

The Agency Official is obligated to satisfy the section 106 requirement, and, if applicable, the section 110(f) requirement, and is granted the authority to approve an undertaking. 36 C.F.R. § 800.2(a) (1999); 36 C.F.R. § 800.1(a) (1998). "The Agency Official may be a State, local, or tribal government who has been delegated legal responsibility for compliance with section 106 in accordance with Federal law." 36 C.F.R. § 800.2(a) (1999); 36 C.F.R. § 800.2(b) (1998). When a project has the capacity to affect adversely a National Historic Landmark, the Agency Official must seek comments from the Advisory Council. 36 C.F.R. § 800.10(b) (1999); 36 C.F.R. § 800.6(a)(1)(i)(B) (1999); 36 C.F.R. § 800.10(a) (1998). Otherwise, requests for input from the Advisory Council are discretionary. 36 C.F.R. § 800.9(a) (1999); 36 C.F.R. § 800.5 (1998).

In addition to the Advisory Council, other parties may have "consultative roles" during the NHPA review process, including: (1) the State Historic Preservation Officer *fn10 who "advises and assists" the reviewing federal agency, 36 C.F.R. § 800.2(c)(1) (1999); (2) the National Park Service ("NPS") *fn11 if the undertaking may adversely affect a National Historic Landmark, 36 C.F.R. § 800.10(c) (1999); (3) a representative of the local government, 36 C.F.R. § 800.2(c)(4) (1999); (4) the applicant seeking federal assistance, 36 C.F.R. § 800.2(c)(5) (1999); (5) certain "consulting parties" who possess "a demonstrated interest in the undertaking," 36 C.F.R. § 800.2(c)(6) (1999); and (6) the public, whose views "are essential to informed decision-making in the section 106 process." 36 C.F.R. § 800.2(d) (1999). See 36 C.F.R. § 800.1(c) (1998).

During the review process, the threshold issues are whether the proposed project amounts to an undertaking and what are the potential effects, if any, of that undertaking. 36 C.F.R. § 800.3(a) (1999); 36 C.F.R. § 800.4(a) (1998). "An undertaking has an effect on a historic property when the undertaking may alter characteristics of the property that may qualify the property for inclusion in the National Register." 36 C.F.R. § 800.9(a) (1998). See 36 C.F.R. § 800.16(i) (1999). "An undertaking is considered to have an adverse effect when the effect on a historic property may diminish the integrity of the property's location, design, setting, materials, workmanship, feeling, or association." 36 C.F.R. § 800.9(b) (1998).

II. The NEPA

Congress enacted the NEPA to promote a national policy of reducing environmental harm. See 42 U.S.C. § 4321. This goal is accomplished by requiring agencies to balance the environmental harms of projects against countervailing benefits, including economic ones. Morris County Trust for Historic Preservation v. Pierce, 714 F.2d 271, 276 (3rd Cir. 1983); Cape May Greene, Inc. v. Warren, 698 F.2d 179, 188 (3rd Cir. 1983). When balancing these competing interests, agencies are not required to elevate environmental concerns over other factors. Ibid. Rather, the NEPA only mandates that an agency consider the environmental consequences of a project. Strycker's Bay Neighborhood Council, Inc. v. Karlen, 444 U.S. 223, 227-28 (1980). Even if a project poses a threat to the environment, as long as the negative effects are considered by the agency, it can still approve the project. Ibid. Consideration of environmental effects is accomplished by preparing an EIS, a "detailed statement" of the effects of a proposed project for all "major Federal actions significantly affecting the quality of the human environment . . . . " 42 U.S.C. § 4332(2)(C).

Like the NHPA, particular substantive outcomes are not required under the NEPA; instead, the focus of the reviewing agency and the public is on the environmental effects of the proposed action. Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 371 (1989) (citations omitted). "NEPA does set forth significant substantive goals for the Nation, but its mandate to the agencies is essentially procedural." Vermont Yankee Nuclear Power Corp. v. Natural Resource Defense Council, Inc., 435 U.S. 519, 558 (1978) (citations omitted). See also Northwest Envtl. Defense Ctr. v. Bonneville Power Admin., 117 F.3d 1520, 1536 (9th Cir. 1997) (citation omitted) ("NEPA exists to ensure a process, not a result.").

STATEMENT OF FACTS *fn12

I. General Information

The Hotel is situated within the Cape May National Historic Landmark District ("NHLD") *fn13 at 251 Beach Drive, and is bounded by Beach Avenue to the south, Perry Street to the east, Congress Place to the north, and Congress Street to the west. (George Lesser Certif. ¶ 7 and Ex. 1). Originally constructed in 1816, the Hotel was destroyed by a fire in 1878, and was rebuilt the following year. (Amended Complaint ¶ 23; Montano Certif. ¶ 3). The Hotel is comprised of two buildings, a four-story L-shaped hotel, and a three-story annex that is connected to the hotel via a one-story porch.

II. The Current Condition of the Hotel

In October 1995, CHP purchased the Hotel. (Amended Complaint ¶ 27). In the spring of 1996, CHP began making some minor structural repairs to the premises, which included removing the paved drive from the front lawn, painting the exterior of the building, and repairing the roof. (Montano Certif. ¶ 17). Over the years the Hotel has suffered some fire, water and structural damage, and the annex has suffered significant structural damage making the west and south walls unstable. Both the Hotel and the annex require the installation of a new roof, mechanical systems, plumbing, and a heating and air conditioning system. Because of the Hotel's condition, it has remained mostly vacant since 1995, although some retail shops located on the first floor of the hotel were occupied for a short time. (Plaintiffs' Response to NJSHPO's Statement of Facts ¶ 5). In 1996, CHP began to formulate plans to rehabilitate the Hotel and to construct a new building on the premises to serve as a conference center. (CHP's Statement of Material Facts ¶ 5).

III. The Agency Review Process Begins

On July 9, 1998, the City published a notice in the Stars and Wave, a local newspaper, informing the public that the City would host a hearing on July 14, 1998 regarding the proposal to submit to the United States Department of Housing and Urban Development ("HUD") a grant and loan application seeking partial federal funding for the project. (Montano Certif. ¶ 24 and Ex. 3). On July 21, 1998, after holding the public hearing at which plaintiffs George Lesser and Barbara Skinner objected to the proposed project, the Cape May Council adopted Resolution No. 202-7-98, which approved the filing of the requisite HUD applications to obtain the following federal funding for the project: (1) a HUD section 108 loan; (2) a HUD Economic Development Initiatives ("EDI") grant; and (3) a HUD Small Cities Economic Development grant. *fn14 (Montano Certif. ¶ 25 and Ex. 4).

On July 27, 1998, Mayor Gaffney's predecessor, Robert W. Elwell, Sr. ("Mayor Elwell"), *fn15 submitted an initial HUD application requesting federal funding for the project. *fn16 (Montano Certif. ¶ 27 and Ex. 6). Several weeks later, on August 10, 1998, CHP submitted a two-part application to the NPS and the NJSHPO seeking a historic preservation certification in order to qualify for a historic rehabilitation tax credit. (Montano Certif. ¶ 30 and Ex. 8).

In early September 1998, the Friends of Congress Hall, an organization comprised of Cape May property owners, submitted to the City and the NJSHPO written opposition to CHP's proposed project. (Montano Certif. ¶ 31 and Ex. 9). They argued that the project will "violate published federal historic preservation standards and guidelines on at least eleven major issues and various minor issues." (Montano Certif. Ex. 9).

By letter dated September 14, 1998, Mayor Elwell requested that the NJSHPO begin an immediate NHPA review of the undertaking. (Montano Certif. ¶ 32 and Ex. 10). On October 9, 1998, Mayor Elwell wrote a follow-up letter requesting that the NJSHPO determine whether the proposed project will have adverse effects so that the City could review those findings and subsequently issue its own determination. (Montano Certif. ¶ 33 and Ex. 11). By letter dated October 19, 1998, the Advisory Council informed Mayor Elwell that he would also have to consult with the Advisory Council to resolve any adverse effects on the NHLD. (Montano Certif. ¶ 34 and Ex. 12). On October 22, 1998, the City published a notice soliciting written public comments on the project and its compliance with applicable federal laws. (Montano Certif. ¶ 35 and Ex. 13). Dozens of public comments were submitted in favor and against the project. (Montano Certif. Exs. 15 and 24).

By letter dated January 12, 1999, the Advisory Council recommended that the City "coordinate the Section 106 review with the Historic Tax Credit review in an effort to avoid delays and duplication of effort." (Montano Certif. ¶ 39 and Ex. 17; George Lesser Certif. ¶ 8). In response to the Advisory Council's letter, the City stated that it was waiting to review the NJSHPO's findings before making its own determination. (Montano Certif. ¶ 40 and Ex. 18). The City's letter also noted that it had received many responses to its request for public comments and that "[a]ll of this input will be taken into consideration as well before making our effect determination." (Montano Certif. ¶ 40 and Ex. 18).

IV. The Project Plans Are Amended

On February 3, 1999, CHP submitted a letter to the NJSHPO seeking to revise the initially proposed project "into a Phased project" under which Phase I would be the rehabilitation of the Hotel, and Phase II would be the construction of the new conference center. (Montano Certif. ¶ 41 and Ex. 19; George Lesser Certif. ¶ 10). On March 29, 1999, CHP submitted an amended historic preservation certification application which sought approval for the phased project to be completed over a sixty-month period. (Montano Certif. ¶ 42 and Ex. 20). According to the amended application, the proposed phasing would be as follows:

Phase I Scheme A:Completion of interior work in existing structures and repair and/or replacement in kind on the exteriors.

Phase I Scheme B:Completion of interior work in existing structures and exterior improvements to existing structures.

Phase II: Completion of remainder of project as shown in application including new addition and exterior improvements. [Montano Certif. Ex. 20.]

By letter dated May 5, 1999, the NJSHPO issued recommendations to CHP in response to the amended application. (Montano Certif. ¶ 43 and Ex. 21; George Lesser Certif. ¶ 14). By letter dated May 10, 1999, CHP requested that the City issue a finding that the proposed project would have "no adverse effect." (Montano Certif. ¶ 44 and Ex. 22).

V. The City Issues Its Effect Determination and the Other Agencies Comment

On May 24, 1999, Mayor Elwell determined that the proposed project would have "no adverse effect" on the Hotel and the NHLD. (Montano Certif. ¶ 46 and Ex. 24). Three days later, the City published a notice advising the public that Mayor Elwell had reached a no-adverse-effect conclusion, but that "notwithstanding the finding of `no adverse effect,' the City is considering the preparation of a document that will mitigate any adverse impacts, if any, from any future renovations, additions or alterations to the Congress Hall Hotel." (Montano Certif. ¶ 47 and Ex. 25). The notice also stated that "the City invites comments from interested parties on the determination made by the City." (Montano Certif. Ex. 25). The City subsequently granted applications for consulting party status to George Lesser and Margaret, Janet, and Barbara Skinner. (Montano Certif. ¶ 48 and Ex. 26; George Lesser Certif. ¶ 15).

The Friends of Congress Hall and George Lesser submitted comments dated June 15, 1999 in opposition to the City's no-adverse-effect determination, claiming that the Mayor's finding "is laughable as a substantively and procedurally defective document." (Montano Certif. Ex. 35). On June 16, 1999, the NJSHPO noted that it would concur with the Mayor's no-adverse-effect assessment as long as nine minor conditions were met, but the NJSHPO found that "the project, taken as a whole (including Phase II), is not yet fully in conformance with the Secretary of the Interior's Standards for Rehabilitation and therefore will have adverse effects on Congress Hall. Accordingly, I agree that we need to develop a Programmatic Memorandum of Agreement for the project." (Montano Certif. ¶ 51 and Ex. 29; George Lesser Certif. ¶ 19) (emphasis in original).

On June 18, 1999, the City held a hearing which was attended by Mayor Elwell, representatives of CHP, the NJSHPO, and the Advisory Council, and the interested parties seeking designation as consulting parties. *fn17 (Montano Certif. ¶ 52). At the meeting, the Advisory Council stated that it intended to conclude that the undertaking could have adverse effects and those potential effects should be mitigated with a PA. (Ibid.). On June 28, 1999, the Advisory Council issued written comments which stated, in relevant part,

that the proposed undertaking when considered in its entirety, will have an adverse effect on the Cape May Historic District National Landmark (NHL) . . . Notwithstanding the developer's assurance that the rehabilitation will meet the Standards, and his acceptance of the conditions set forth in the New Jersey SHPO's comment letter of June 16, 1999, to the City, we believe additional mitigation measures are warranted for Phase I, and ongoing consultation to resolve adverse effects which may occur during Phase I and subsequent phases is needed.

To facilitate future consultation meetings, we have prepared a detailed outline which we recommend that the City use to draft a Programmatic Agreement (PA) (see Attachment B). Provisions included in the PA should 1) address known and potential adverse effects to Congress Hall which may result from the proposed rehabilitation and new addition; 2) provide for an analysis of alternatives to meet the parking requirements for the project; 3) consider the long- term indirect effects of the entire undertaking on the NHL; and 4) commit the City to exploring strategies to address the systemic parking problems within the NHL. In addition, the Agreement should provide for continued public input during the coordination of post-agreement reviews. Once the draft PA is prepared, it should be distributed to all consulting parties for their review and comment. The City should then convene another meeting in two to three weeks for all parties to discuss the draft PA and modifications to clarify and, if appropriate, expand the mitigation plan. [Montano Certif. Ex. 30.]

VI. The Drafting and Re-Drafting of the PA

On June 29, 1999, CHP submitted to the City a draft PA which attempted to take into account most of the issues raised during the June 18, 1999 hearing. (Montano Certif. ¶ 54 and Ex. 31). On June 30, 1999, Mayor Elwell responded to the Advisory Council's June 28, 1999 letter by forwarding a draft PA for consideration. (Montano Certif. ¶ 55 and Ex. 32). On July 12, 1999, counsel for the Skinners submitted to the Advisory Council written comments, which claimed that "the project will cause significant and substantial adverse effects on [t]he Congress Hall Hotel and its site, on the Skinners' own historically significant property and on the Cape May National Historic Landmark District." (Montano Certif. Ex. 33). In late July 1999, the City circulated a draft PA to all consulting parties and agencies. (Montano Certif. ¶ 60 and Ex. 36).

In early August 1999, CHP submitted a second amended Part II Historic Application. (Montano Certif. ¶ 61; Montano Certif. Ex. 37). By letter dated August 12, 1999, the NPS acknowledged receipt of the second amended application and requested the submission of additional materials to complete it. (Montano Certif. ¶ 62 and Ex. 38).

On August 13, 1999, the consulting parties, including the Lessers and Skinners, attended a second meeting to discuss the draft PA. (Montano Certif. ¶ 63; Mayor Gaffney Certif. ¶¶ 7-8). At the meeting, the consulting parties argued that an MOA should be utilized, rather than a PA. (Montano Certif. ¶ 63). The Advisory Council rejected their request, citing the complexity of the project and the uncertainty of the addition as reasons not to use an MOA. (Montano Certif. ¶ 63). With respect to the permissibility of lawn parking, the Advisory Council claimed that it was a local zoning matter since the project did not propose any changes to the lawn itself. (Montano Certif. ¶ 63).

By separate letters dated August 27, 1999, the Friends of Congress Hall and the Skinners submitted their respective comments on the draft PA. (Montano Certif. ¶¶ 64-65 and Exs. 39-40). On September 22, 1999, the Skinners submitted additional comments. (Montano Certif. ¶ 67 and Ex. 42).

On September 3, 1999, the Cape May Solicitor requested written confirmation from the Advisory Council that the City had complied with the documentation requirements of the NHPA review process. (Montano Certif. ¶ 66 and Ex. 41). On October 18, 1999, the Advisory Council confirmed that the City had met those requirements. (Affidavit of Mayor Gaffney, Ex. I).

In early October 1999, the Mayor circulated the Advisory Council's revised draft of the PA which addressed the concerns raised by the consulting parties, including

the need for Phase I activities to be reviewed before completion of the design of Phase II because of financing deadlines;

the need for compatibility with the architectural character of the Cape May National Historic Landmark District, as a whole, not just contributing buildings adjacent to the project site; the need to provide for ongoing involvement of the consulting parties during the revision of plans for rehabilitation and design development of the addition;

the importance of the current lawn configuration, and the need to expand and restore this feature if the City can identify alternate off-site parking to respond to the local zoning requirements for commercial buildings;

potential impacts of noise, lighting, and pollution; the need for an analysis of alternatives for the design of Phase II; the amount of parking to be allowed at Congress Hall should Phase II be completed;

the roles and responsibilities of signatories to the PA; and,

the need for future public briefings by the City regarding the status of the project. [Montano Certif. Ex. 45.]

On October 18, 1999, the final PA was forwarded to the Mayor and the document was subsequently executed. (Montano Certif. ¶ 72 and Exs. 47-48).

During the fall of 1999, the Washington and Philadelphia branch offices of the NPS issued conflicting effect determinations with respect to the project. However, on November 15, 1999, the Washington NPS branch office issued a letter superseding all prior determinations by the branch offices and concluded that the project would not have any adverse effects if certain conditions were met. *fn18 (Montano Certif. Ex. 50). Further, the NPS conditionally approved the amended part two of the historic tax credit application. (Montano Certif. ¶ 75 and Ex. 50). One condition was that "[t]here will be no expansion of parking on the site beyond what is currently permitted by the mercantile license issued by the City of Cape May . . . . " (Montano Certif. Ex. 50). The NJSHPO subsequently confirmed that it agreed with the conditional approval granted by the NPS. (Montano Certif. ¶ 76 and Ex. 51).

On November 30, 1999, plaintiffs initiated this action by filing a complaint. On December 7, 1999, the City of Cape May Historic Preservation Commission approved the Phase I plans. (Montano Certif. ¶ 77). On December 17, 1999, plaintiffs filed an amended complaint.

STANDARD OF REVIEW

I. The APA

5 U.S.C. § 702 provides in pertinent part: "A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof." When reviewing an agency decision, the court must "determine whether the agency complied with the procedures mandated by the relevant statutes." Vermont Yankee Nuclear Power Corp., supra, 435 U.S. at 549 n.21 (citation omitted). See 5 U.S.C. § 706(2)(D). The standard of review for a discretionary agency decision is whether it was "arbitrary, capricious, an ...


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