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In re Stream Encroachment Permit

September 17, 2008

IN THE MATTER OF STREAM ENCROACHMENT PERMIT, PERMIT NO. 0200-04-0002.1 FHA, INCLUDING STORMWATER MANAGEMENT APPROVAL; WATERFRONT DEVELOPMENT PERMIT, PERMIT NO. 0200-04-0002.1 WFD040001 (THE "WFD PERMIT"); WATER QUALITY CERTIFICATE (ISSUED AS PART OF THE WFD PERMIT); AND COASTAL ZONE CONSISTENCY DETERMINATION (ALSO ISSUED AS PART OF THE WFD PERMIT) FOR THE PROPOSED XANADU PROJECT ISSUED BY THE NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION ON OCTOBER 4, 2004.
IN THE MATTER OF THE ISSUANCE OF A WATERFRONT DEVELOPMENT PERMIT, WATER QUALITY CERTIFICATE, COASTAL ZONE CONSISTENCY DETERMINATION AND STREAM ENCROACHMENT PERMIT BY THE NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION FOR THE MEADOWLANDS XANADU PROJECT PERMIT NOS.: 0200-04-0002.1 WFD 040001 AND 0200-04-0002.1 FHA 040001.



On appeal from the New Jersey Department of Environmental Protection, File No. 0200-04-0002.1.

The opinion of the court was delivered by: Lyons, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued January 30, 2008

Before Judges Wefing, Parker and Lyons.

Sierra Club, New Jersey Public Interest Research Group Citizen Lobby, Inc. and New Jersey Environmental Federation (collectively Sierra) and Hartz Mountain Industries, Inc. (Hartz) appeal from the New Jersey Department of Environmental Protection's (NJDEP) approval of The Mills Corporation and MackCali Realty Corp.'s (Mills) application for various permits sought in connection with the development of the Meadowlands Xanadu project. The project is a mixed use development consisting of entertainment, retail, office, and hotel components and is being constructed surrounding what is now known as the Izod Center and was formerly known as the Continental Airlines Arena site within lands owned by the New Jersey Sports & Exposition Authority (NJSEA).

This is the companion case to In The Matter Of The Proposed Xanadu Redevelopment Project And The Approval Of The Joint Hearing Officers' Report By The New Jersey Meadowlands Commission And The New Jersey Department Of Environmental Protection Pursuant To N.J.S.A. 5:10-23 And Of The Section 5(X) Consultation Report By The New Jersey Meadowlands Commission Pursuant To N.J.S.A. 5:10-5(X) With Respect To The Proposed Project, No. A-0674-04T1 & A-0688-04T1 (App. Div. ___ ___, 2008) (slip op.), which provides a more detailed factual background of the development. The following factual and procedural history is specifically relevant to our consideration of the issues advanced on this appeal.

I. FACTS AND PROCEDURAL HISTORY

On January 20, 2004, Mills submitted a multi-permit application to the NJDEP for: (1) a waterfront development permit; (2) a water quality certificate; and (3) a coastal zone consistency determination. The application also sought a stream encroachment permit. On February 18, 2004, Mills filed an attachment to the application labeled as "Attachment K" and as an "Alternatives Analysis." On the same date, the NJDEP's Land Use Regulation Program sent a letter to Mills' engineering consultant, outlining certain information that the NJDEP needed before the applications could be deemed administratively complete. Mills submitted a revised version of the Alternatives Analysis on May 7, 2004, to supersede its February 18 submittal. In June and July 2004, Mills agreed to extend the time within which the NJDEP had to review the application due to Mills having filed additional information. That additional information included a June 10, 2004, Stormwater Management Report, and a "Supplement to the Alternatives Analysis" dated July 30, 2004. On August 3, 2004, Mills submitted additional administrative and technical information.

On August 18, 2004, the NJDEP, by letter, advised Mills that the permit application was now complete; that Mills was required to submit additional information to show compliance with the NJDEP's Stormwater Management Rules, N.J.A.C. 7:8-1.1 to -6.3; and that a public hearing was scheduled for September 13, 2004.

On September 13, 2004, in addition to conducting the public hearing, the NJDEP staff issued its preliminary analysis of the application. It concluded that certain additional studies and information were needed to assess compliance with the NJDEP's coastal zone management rules. The analysis also noted that, while this application process was ongoing, a separate consultation process with public hearings conducted by the New Jersey Meadowlands Commission (NJMC) and the NJDEP, was occurring, pursuant to N.J.S.A. 5:10-23. The analysis further noted that the hearing officers in that matter had issued a report on August 19, 2004, and that report, together with its recommendations and requirements, were included in the analysis where appropriate. At the hearing, both Sierra and Hartz representatives appeared and testified, among others. At the conclusion of the hearing, the parties were advised that the record would remain open for fifteen days so that written comments could be submitted to the NJDEP.

During the post-hearing comment period, Mills provided the NJDEP with additional items: information regarding its transfer of the Empire Tract and its wetlands mitigation plans; its stormwater management plans; drawings for a parking deck that it previously had submitted to the Department of Community Affairs; and comments on the NJDEP's preliminary analysis. Comments were also filed by Hartz and Sierra.

On October 4, 2004, the NJDEP conditionally approved the application for the NJDEP permits. On that same day, the NJDEP also issued a "summary analysis" explaining its reasoning for approval. Also on that same day, the NJDEP granted Mills a stream encroachment permit. The approval permits were subject to eight general conditions and twenty-six special conditions, which included issues related to traffic and transportation; air quality; stormwater; and wetlands impacts. These appeals ensued.

In October 2004, the Borough of Carlstadt, which has not filed an appeal in this matter, requested a third-party hearing before the NJDEP. On January 12, 2006, the NJDEP denied that request, but in discussing the merits of the Borough's arguments, the NJDEP made some additional findings concerning wetlands, stormwater management, traffic, air quality, and other permitting issues.

Hartz and Sierra also filed appeals in federal court, challenging a freshwater wetlands permit issued in March 2005 by the Army Corps of Engineers. This permit allowed Mills to fill approximately 7.69 acres of wetlands for the Xanadu project. Hartz's federal appeal was dismissed for lack of standing, and on September 28, 2006, the Sierra appeal was dismissed on the merits. Sierra Club v. U.S. Army Corps of Eng'rs, 450 F. Supp. 2d 503 (D.N.J. 2006).*fn1

II. POINTS ON APPEAL

On appeal, Sierra and Hartz argue that deference need not be accorded the factual and legal findings of the NJDEP. They argue that: there was an insufficient factual basis for the NJDEP to grant the permits in the first instance; the necessary findings were not made by NJDEP; and the NJDEP impermissibly issued conditional permits. They also argue that the issuance of the permits is without legal basis, particularly asserting that the permits violate N.J.A.C. 7:7E-3.27(c)(1). That regulation prohibits developments in wetland areas unless certain conditions are met. Lastly, the parties argue that the conditions imposed on the permits give rise to Mills being required to file additional submissions in the future and that they and the public will not be effectively permitted to comment on such later filed submissions.

The NJDEP, on the other hand, argues that its decision is entitled to substantial deference; that there is substantial credible evidence in the record to affirm the issuance of the permits; and that the decision to allow the filling of the wetlands was proper because the Army Corps of Engineers granted a permit which renders moot the NJDEP permitting issue and appropriate regulations were complied with. Mills also argues that the NJDEP's decision is entitled to judicial deference; that there is no prohibition to the conditions that were ...


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