New Jersey Future Redevelopment ForumMarch 1, 2013

Redevelopment and Port Authority:

Competing and Complimentary

“Public Interests”

Anne S. Babineau, Esq.Wilentz, Goldman & Spitzer, P.A.90 Woodbridge Center Drive Woodbridge, New Jersey 07095

Compact of 1921

Port Authority of New York and New Jersey

• Created by “Compact of 1921.”

• A political compact, by its very nature, shifts a part of a state's authority to another state or states, or to the agency the several states jointly create to run the compact," the Appellate Division held in Dittrich v. Port Authority of New York and New Jersey, Dkt. No. A-1289-11T1, 2012 N.J. Super. Unpub. LEXIS 2254, Oct. 4, 2012.

Compact of 1921

• “The Port Authority was created in 1921 by an interstate compact between New York and New Jersey, the New York-New Jersey Port Authority Compact of 1921 (the Compact), and with the consent of Congress, pursuant to the Compact Clause. U.S. Const. art. I, § 10, cl. 3.”Dittrich, 2012 N.J. Super. Unpub. LEXIS 2254, *2.

Compact – Creates “instrumentality” of NJ and NY

• As a bi-state entity, the Port Authority is to "be regarded as the municipal corporate instrumentality of the two states for the purpose of developing the port...." N.J.S.A.32:1-33 (emphasis added); see also Bunk v. Port Auth. of N.Y. & N.J., 144 N.J. 176, 184 (1996) ("The Port Authority is not the agency of a single state but rather a public corporate instrumentality of New Jersey and New York."). Dittrich, 2012 N.J. Super. Unpub. LEXIS 2254, *2.

Compact

• The Compact defined a Port District

– Provided for its administration by a Port Authority that was to coordinate terminal, transportation, and other facilities of commence.

– Also responsible for development, construction, operation and protection of the Port District.

Potential for Competing “Public Interests”

• If States decide to advance the mutual interests of the citizens of both states by joint action to overcome common problems, they have to cede power to allow PA to carry out the delegated duties and responsibilities.

• Depending on how far the grant of power to the PA is determined to extend, State/Local can be determined to have deferred the exercise of what would have been their power to advance public interest.

Eastern Paralyzed Veterans Assn., Inc. v. Camden

The Controversy:

• “EPVA sued the City and the DRPA to require the installation of an elevator [which DRPA had not included in plans for station]. The EPVA alleges that under N.J.S.A. 52:27D-129b the construction by the DRPA of any structure or building in the State of New Jersey is subject to the requirements of the State Uniform Construction Code Act….” Eastern Paralyzed Veterans Assn., Inc. v. Camden, 111 N.J. 389, 395 (1988).

• The City of Camden claimed that it wanted to install the elevator but that the DRPA and PATCO had prevented it from doing so.

Eastern Paralyzed Veterans Assn., Inc. v. Camden: Court’s Decision

• Decision:

• “We hold that the State of New Jersey cannot exercise unilateral jurisdiction over the DRPA; to the extent that the judgment of the trial court involves a mandatory injunction to compel the DRPA to comply with the directives of the Department of Community Affairs, that judgment must be vacated.” Eastern Paralyzed Veterans Assn., Inc., 111 N.J. at 407.

Eastern Paralyzed Veterans Assn. v. Camden: Court’s Decision

• Rationale:

“…to hold that the DRPA is subject to the New Jersey Uniform Construction Code would result in the imposition, unauthorized by the bi-state compact, of substantial duties or responsibilities on that Authority. Both New Jersey and Pennsylvania have consistently required complementary state legislation for single-state jurisdiction to be exercised over the Authority.” Eastern Paralyzed Veterans Assn., Inc., 111 N.J. at 398.

Eastern Paralyzed Veterans Assn., Inc. v. Camden

• The Court said:

“…[B]efore a court can conclude that the agency impliedly consented to New Jersey's design requirements, it must consider the question of whether the structural change would significantly affect PATCO's operations.” Eastern Paralyzed Veterans Assn., Inc., 111 N.J. at 392.

Eastern Paralyzed Veterans Assn., Inc. v. Camden: Rationale of Decision

• “…[W]e are led ultimately to consider the real policy question in this case. That question is not whether there shall be an elevator in a building, but whether and on what terms the handicapped shall have access to public transportation. For underlying the dry technicalities of jurisdiction is the more fundamental question of governmental transit policy. It is not the burden of an elevator on its property that troubles the DRPA, but the burden of an elevator on its rail operations.”Eastern Paralyzed Veterans Assn., 111 N.J. at 404.

Redevelopment and Port AuthorityComplimentary and Competing

“Public Interests”

• Examples

– Industrial Development Projects

– Hoboken Waterfront

– Jersey City Redevelopment

– Portfields Initiatives

Industrial Development Projects

The Port Authority has a number of important industrial properties in the New York and New Jersey region. These include the IndustrialPark at Elizabeth.

Industrial Development Projects Statute

• Industrial development project or facility" means

– any equipment, improvements, structure or facility or any land, and any building, structure, facility or other improvement thereon, or any combination thereof, and all real and personal property,

– located within…a municipality in the New Jersey portion of the port district which qualified for State aid…

– which shall be considered suitable by the port authority for manufacturing, research, non-retail commercial or industrial purposes within an industrial park, or for purposes of warehousing or consumer and supporting services directly related to any of the foregoing or to any other port authority project or facility. N.J.S.A. 32:1-35.73.

Industrial Development Projects Statute

• “The port authority and the city, town, township or villagein which any industrial development project or facility is to be located and for whose benefit such project or facility is undertaken are hereby authorized and empowered to enter into an agreement or agreements to provide which local laws, resolutions, ordinances, rules and regulations, if any, of such city, town, township or village affecting any industrial development project or facility shall apply to such project or facility. All other existing local laws, resolutions, ordinances or rules and regulations not provided for in such agreement shall be applicable to such industrial development projects or facilities.” N.J.S.A. 32:1-35.83.

Industrial Development Projects Statute

• “So long as any facility constituting a portion of any industrial development project or facility shall be owned, controlled or operated by the port authority, no public authority, agency, commission or municipality of either or both of the two states shall have jurisdiction over such project or facility nor shall any such public authority, agency, commission or municipality have any jurisdiction over the terms or method of effectuation of all or any portion thereof by the port authority.” N.J.S.A. 32:1-

35.83.

Hoboken Statute

• Southern Waterfront Project

• “The Port Authority is authorized and empowered, as limited by sections 6 and 7 of this 1984 amendatory and supplementary act, to effect, establish, acquire, construct, rehabilitate, improve, maintain or operate one waterfront development project in the State of New York and one waterfront development project in the State of New Jersey;” N.J.S.A. 32:1-35.36e.

Hoboken Statute

• “A waterfront development project in the city of Hoboken shall be located on all that certain piece, parcel or tract of land, situate, lying and being in the city of Hoboken, in the county of Hudson and the State of New Jersey, more particularly bounded and described as follows …”N.J.S.A. 32:1-35.36f.

Hoboken Site – PA “District”Expanded

Hoboken Site

Hoboken Site

Hoboken Statute

• “The undertaking by the Port Authority of any waterfront development project in the State of New York or the State of New Jersey, or of any alternative to either of the two projects authorized pursuant to section 5 of P.L.1983, c. 9 (C. 32.1-35.36f) and by section 5 of this 1984 amendatory and supplementary act, shall be subject to the prior express approval of the project by the city, county, town or village of the State of New York in which the project is to be located, or by the city, county, town, borough or township of the State of New Jersey in which the project is to be located.”N.J.S.A. 32:1-35.36m.

Hoboken Process –“Public Interest”

• Provided for considerable local input to determining what was public interest

– City adopted a resolution agreeing in principal to enter a development agreement with the Port Authority.

– Adopted a Redevelopment Plan setting forth the City’s objectives for the Project.

– Negotiated a detailed redevelopment agreement called the “Municipal Development Agreement, and a Lease” pursuant to which the Project would be developed.

Tumpson v. Farina

• Controversy:

The City approved the MDA & Lease, a Petition for Referendum, and when it did so, it acted by Ordinance. A Petition was filed seeking to put the question of whether the MDA & Lease should be adopted to an up or down vote.

Tumpson v. Farina

• Decision:

The Trial Court determined that the matter was not appropriate for decision on a referendum. Ultimately, the Supreme Court of NJ determined that it was, saying:

– “we are unable to conclude that the Legislature considered or addressed the referendum issue [in the Hoboken Statute]”

Tumpson v. Farina, 120 N.J. 55, 57 (1990).

Tumpson v. Farina

• Court explained its rationale:

– “Legislation enables the Port Authority to participate in the Hoboken redevelopment project with the express approval of the City.”

– By incorporating the Compact of 1921, which created the Port Authority, see N.J.S.A. 32:1-35.36m, the Legislature conditioned such participation solely on the granting of municipal approval in the form of a resolution of consent. N.J.S.A. 32:1-23. Notwithstanding the incorporated provisions of N.J.S.A. 32:1-23, the municipality proceeded by the ordinance method, thereby insuring broader and fuller public participation in the process of giving consent to the Port Authority's role.

Tumpson v. Farina

• Rationale:

– “In addition, although the city had on May 3, 1989, adopted a resolution agreeing in principle to enter a development agreement with the Port Authority, neither the Port Authority nor the State of New Jersey, through the Attorney General, has asserted that the provision for a referendum on this ordinance will be an unwarranted infringement on the bi-state agency's role. See Eastern Paralyzed Veterans Assn, Inc. v. City of Camden, 111 N.J. 389.

Hoboken Site Today Southern Waterfront Project

Jersey City: Newport and Port Authority

• Port Authority – interested in acquiring property in the middle of Newport Redevelopment Plan Area.

• Collision Course – or Opportunity for advancing both public interests?

Jersey City: Newport and Port Authority

• Expansion of service facilities around Holland Tunnel and improvements to Holland Tunnel Vent Shaft: a case of “substantial duties or responsibilities on that Authority”?

• JCRA and Redeveloper also implementing significant public purpose: redevelopment of blighted waterfront with mixed use project.

PATH v. J.C. North Shore Associates, et al.

• Controversy:

– PATH filed a condemnation action to acquire land acquired by the Redeveloper of the Newport Redevelopment Project to construct a ventilation shaftnear the Pavonia Avenue Station.

– PATH acknowledged that the location of the structure would be “at a central point within the first phase of the redevelopment project.”

PATH v. J.C. North Shore Associates, et al.

• JCRA sought to intervene in the condemnation action and filed a separate condemnation action.

• Settlement was reached by parties.

PATH v. J.C. North Shore Associates, et al.

• Settlement:

– Property transferred to PATH for ventilation shaft

– JCRA agreed to exclude the portion of its condemnation action the property which was the subject of the PATH taking.

– Parties agreed on changes to the design of the Ventilation Shaft.

Vent Shaft Today

PATH & Port Authority v. Newport City Development Company, et al.

• Controversy:

– Port Authority sought to condemn part of Jersey City’s Newport Redevelopment Plan Area for improvement to maintenance and service facilities for Port Authority.

– City objected due to impact on redevelopment project.

PATH & Port Authority v. Newport City Development Company, et al.

• Preliminary Decision:

– On the Order to Show Cause return date, Judge Humphreys determined that “possession will be stayed pending further order of the Court” and ordered parties to “intensively explore alternate proposals to the condemnation of these parcels.”

• Ultimate Resolution:

– The parties negotiated terms to satisfy needs of PA and City

Port Authority Trans-Hudson Corp. v. Newport City Development Company, et al.

• Controversy:

– PATH & Port Authority filed condemnation to acquire certain land acquired by the Newport Redeveloper on land adjacent to the PATH’s Newport Station and the Holland Tunnel facilities of Port Authority.

– The JCRA sought and was granted intervention.

– The acquisition was opposed, based on its potential to disrupt the Redevelopment Project.

Port Authority Trans-Hudson Corp. v. Newport City Development Company, et al.

• Ultimate Resolution:

– PATH agreed to make improvements to the Pavonia Avenue PATH Station (Newport Station).

– The redeveloper agreed to contribute $1M to the costs of improvement.

Port Authority Trans-Hudson Corp. v. Newport City Development Company, et al.

• At time of reopening of rehabilitated station, Port Authority Executive Director Joseph J. Seymour said:

"The completion of this $19 million rehabilitation project is another example of the Port Authority’s dedicated effort to rebuild the area’s infrastructure and revitalizing the region’s economy."

Renewed PATH Station in Newport

Portfields Initiative

• Program of PA and NJ EDA

– Helps communities, private developers, and others transform underutilized and brownfield sites into productive warehousing and distribution centers.

– EDA has power to undertake “projects” with considerable tools to accomplish that purpose, with consent of local municipality. N.J.S.A. 34:1B-5d.

Portfields Initiative

These centers will support emerging market opportunities for new ocean and air freight-related warehousing and

distribution operations.