Environmental Review of Meadowlands Redevelopment Provides Helpful Procedural Guidelines

The Meadowlands redevelopment's environmental-review saga provides helpful procedural guidelines for others contemplating new construction.

As anyone who has undergone a major building or redevelopment project can attest, one of the most difficult parts of the process is working with state and local agencies to assess the project's potential environmental impact. When the project in question is a sprawling $1.3 billion development featuring 2.6 million square feet of retail and entertainment outlets and 2.2 million square feet devoted to hotel rooms and offices, those difficulties multiply quickly - particularly if the project's opponents are well organized and deep-pocketed.

In 2002, the New Jersey Sports and Exposition Authority issued a public request seeking proposals for the redevelopment of the 104-acre Meadowlands arena site (then Continental Airlines Arena; now the IZOD Center) adjacent to Giants Stadium. After selecting co-developers Mills Corporation (now defunct) and Mack-Cali Realty for the project, the NJSEA, as required by statute, presented plans for what was called the Xanadu Redevelopment Project in a public forum before the New Jersey Department of Environmental Protection (NJDEP) and the New Jersey Meadowlands Commission (NJMC). In addition, the NJSEA presented an almost 3,000-page preliminary Environmental Impact Statement (EIS) for public review. Before long, a final EIS was submitted, asserting that with one exception (the presence of the black-crowned night heron, a state-listed endangered species for breeding populations only), no special wildlife, threatened-species or endangered-species habitats had been identified on the site. The EIS also contained the results of a stormwater management study, various traffic studies and air-quality assessments.

A couple of weeks later, the NJMC and NJDEP filed a joint report that recommended the NJSEA revise its stormwater management plan, conduct a new traffic-impact analysis, and revise its air-quality analysis. The joint report, however, concluded that the Xanadu project could advance, provided the developers complied with numerous conditions, in particular the submission of quarterly reports to the NJDEP and NJMC to demonstrate compliance. At the same time, the NJMC's executive director, as required, separately issued a report on the project's environmental impact.

In June 2004, the developers began $72 million of pre-construction on the site, including electrical, sewerage and other utility work. In late September, they officially broke ground, but not before a notice to stop construction activity was filed by Hartz Mountain Industries (which had unsuccessfully bid to redevelop the site), along with a consortium of environmental advocacy groups led by the New Jersey chapter of the Sierra Club.

The court denied the motion (work has continued on the site ever since), and the plaintiffs appealed to the Superior Court of New Jersey [402 N.J. Super. 607; 955 A.2d 976; 2008], presenting two arguments. First, they argued that the NJSEA failed to meet the consultation requirements mandated under state law. In particular, they argued that the joint consultation hearing process should have involved a quasi-judicial hearing, because it was, in essence, a process in lieu of the traditional municipal zoning or planning board review. Those hearings, Hartz Mountain and the Sierra Club argued, would have to afford those with objections the opportunity to cross-examine the NJSEA and Mills Corp., as well as any witnesses. Without such an opportunity, the plaintiffs argued, the approvals must be ruled void. Second, the plaintiffs argued that the approvals given by NJDEP and NJMC were invalid because they were granted without adequate review of numerous issues, such as traffic, transportation, air quality and stormwater management.

In finding that the first argument had no merit, the court ruled that the need for a hearing is determined by whether the administrative agency is acting in a legislative or a quasi-judicial capacity. In this case, the court held, legislative hearings were all that was required; the hearings, the court ruled, were proper and afforded all interested parties a sufficient opportunity for public comment.

However, even though a quasi-judicial hearing was not required, the court noted that there were certain procedural and substantive requirements that must be met in order to comply with the Legislature's mandate for consultation. For example, the NJSEA must first submit in writing to NJMC and NJDEP a description of its proposed project, as well as an environmental impact statement. A hearing must be scheduled, which should afford the public an opportunity to comment on the proposal. In addition, there must be sufficient notice and opportunity to review the proposal before the hearing. In response to the NJSEA's proposed project, NJMC and NJDEP must each provide an opinion that informs the NJSEA of its views with regard to the project site and the project's ecological impact, with particular emphasis on whether the project will disturb the site's environmental balance. Finally, the NJSEA must give every consideration to the concerns raised in each agency's opinion. However, the court made it clear that the agencies are only consultants, not arbiters with respect to a proposed project. Therefore, the court held, the agencies do not have the power to approve or reject the project; rather, they only have the power to offer their opinion and make nonbinding recommendations to the NJSEA.

Having outlined the procedural and substantive requirements, and finding that the NJSEA had complied with all statutory procedures, including those involving consultation, the court moved on to the plaintiffs' second argument. Was the record inadequate for the NJMC and NJDEP to perform their consultation obligations, rendering their recommendations invalid?

The court said no: There was substantial evidence in the record to support the agencies' recommendations, according to the court. In support of this finding, the court noted that the preliminary environmental impact statement was lengthy and detailed. Both agencies specifically noted those areas that were lacking, and, applying their expertise, pointed out what studies would have to be done in order for the proposed project to, in their opinion, be environmentally sound and properly located. In particular, the agencies found the Xanadu project to be satisfactory with regard to its ecological impact on the Meadowlands, and in its location and site, provided certain specific studies were conducted, and that NJSEA and the developer responded appropriately to those studies as the project was being developed.

While the court acknowledged that it would have been more comfortable had a regional traffic study, more detailed air-quality assessments and a completed groundwater application been submitted before the agencies issued their opinion, the court also recognized that normally an agency's action is given a deferential standard of review, particularly where the agency exercises a technical expertise that is not possessed by the court.

The final issue examined by the court was whether the agencies clearly erred in reaching their conclusions. In particular, the court examined whether the agencies' actions were arbitrary, since they chose to issue their opinion on condition that certain studies be performed in the future. In ruling that the agencies' actions were not arbitrary, the court noted that the reports were only filed after a thorough review of the preliminary environmental impact statement, after receiving and digesting public comments, and after applying their expertise to the evidence in the record. Therefore, the court held, even though their approach may not have been perfect, it was not arbitrary or capricious, and not in error.

The Xanadu project has continued to be a magnet for environmental-related litigation. For example, Hartz Mountain was again a plaintiff in 2005 in a case filed against the United States Army Corps of Engineers and the Meadowlands Mills/Mack-Cali Limited Partnership that challenged a permit issued by the Army Corps allowing a portion of wetlands to be filled. And the regulatory arguments continue. At issue is an initial requirement that the Xanadu developers obtain LEED certification, subsequently downgraded by the NJDEP due to the project's complexity - it is so complex, in fact, that the U.S. Green Building Council lacks a complete LEED checklist that would apply to it. The Sierra Club has signaled its willingness to file another appeal, this time to the state Supreme Court, forcing the project to adhere to the initial 2004 recommendations.

While most athletics and recreation administrators will never be involved in such a massive undertaking, the Superior Court of New Jersey's decision in the Xanadu case provides some helpful procedural guidelines for anyone embarking on a building project. First, since all projects are different, it is important that administrators understand what types of approvals must be granted before work can begin. Second, it is essential that administrators work with all necessary state and local environmental agencies on the project. Third, depending on the size of the project, getting an environmental impact study may be required. Finally, in addition to state and local governments, it is also a good idea to get local neighbors or stakeholders involved in the process. If you can address their concerns early, you may be able to maintain your construction timetable and keep any disputes out of the courts.