CIBA Specialty Chems., Corp. v. Twp. of Dover

Decision Date24 February 2021
Docket NumberDOCKET NO. A-3963-18
PartiesCIBA SPECIALTY CHEMICALS, CORP., Plaintiff-Respondent/Cross-Appellant, v. TOWNSHIP OF DOVER, Defendant-Appellant/Cross-Respondent. CIBA SPECIALTY CHEMICALS, CORP., Plaintiff-Respondent/Cross-Appellant, v. TOWNSHIP OF TOMS RIVER, Defendant-Appellant/Cross-Respondent. BASF CORP., Plaintiff-Respondent/Cross-Appellant, v. TOWNSHIP OF TOMS RIVER, Defendant-Appellant/Cross-Respondent.
CourtNew Jersey Superior Court — Appellate Division

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

Before Judges Fuentes, Whipple and Firko.

On appeal from the Tax Court of New Jersey, Docket Nos. 5635-2004, 1986-2005, 1501-2006, 3458-2007, 5340-2008, 5210-2009, 4487-2010, 4486-2010, 2155-2011, 2037-2012, 6367-2013, 3624-2014, 1913-2015, 3054-2016, 3686-2017, 1627-2018 and 1066-2019.

John F. Casey argued the cause for appellant/cross-respondent (Chiesa Shahinian & Giantomasi, PC, attorneys; John F. Casey, on the briefs).

Philip J. Giannuario argued the cause for respondent/cross-appellant (Garippa, Lotz & Giannuario, PC, attorneys; Philip J. Giannuario, Brian A. Fowler, and Adam R. Jones, of counsel and on the briefs).

PER CURIAM

Defendant The Township of Toms River, formerly known as Dover Township (the Township), appeals from the judgment of the Tax Court findingthat a tract of land consisting of 1211 acres "was development-prohibited" during tax years 2004 through 2018, due to its designation by the Environmental Protection Agency (EPA) as a Superfund site and subsequent listing in the National Priorities List (NPL). In its cross-appeal, plaintiff CIBA Specialty Chemicals Corporation (CIBA) also contends the Tax Court erred by failing to determine the number of developable acres on the property. We affirm.

I.

We briefly describe the relevant proofs presented during the four phases of the trial. CIBA conducted chemical manufacturing operations on the subject property consisting of 1211 acres in the Township for many years. In addition to abutting a river, the property contained 32.6 acres of freshwater wetlands and State open waters, 6.4 acres of wetlands buffers, and 43.7 acres of intermittent stream corridors as well as flood hazard areas.

The Toms River Chemical Company developed 320 acres of the property for the manufacture of dyes, pigments, resins, and additives, and conducted related operations, such as waste management and disposal. Manufacturing began in 1952 and was "scaled back" in the early 1980's, when the company was acquired by CIBA. On April 24, 1989, the EPA issued its Record of Decision(ROD)1 for Operable Unit 1 (OU1), which included the sealing of contaminated wells, installation of a groundwater extraction and treatment system, and discharge of the treated groundwater. The groundwater extraction and treatment system commenced in March 1996 and was to continue until "restoration standards" were met. Manufacturing operations also ceased in 1996.

On September 29, 2000, the EPA issued the ROD for Operable Unit 2 (OU2), which was the remediation of "source areas" of the site's contamination. The two landfills would remain and be subject to DEP regulation. Those operations contaminated the soil and groundwater leading to the EPA designating the property as a Superfund site of approximately 1350 acres. While the EPA had primary oversight and responsibility for approving the environmental remediation work, the New Jersey Department of Environmental Protection (DEP) retained jurisdiction to enforce applicable state standards and regulations. Notably, the property was subject to the Coastal Area Facility Review Act, N.J.S.A. 13:19-1 to -21 (CAFRA), and the DEP designated the property as being within the CAFRA Mainland Coastal Center, Coastal Suburban Planning Area, and Coastal Environmentally Sensitive Planning Area. On September 4, 2001, CIBA and the EPA entered into a consent decree to settlethe EPA's action concerning the ROD for OU2. The second decree complemented the consent decree relative to OU1, which remained independently enforceable on its own terms.

The OU2 consent decree defined the Site as including the entire property and addressed where hazardous substances "have migrated or are migrating, and all suitable areas for implementation of the response action" described in the ROD for OU2. CIBA was to record the consent decree as a notice to any successor in title to the property and record an environmental protection easement in favor of the EPA over the entire property.

Commencing in tax year 2004, after the end of CIBA's manufacturing and the start of environmental remediation, the Township began assessing the property according to residential usage, not yet authorized by the zoning ordinance, that the Township believed the realty market would anticipate with the property. CIBA and its successor, BASF Corporation (BASF), brought appeals for tax years 2004 through 2018 to challenge the assessments.

Because of the complex issues involved, the Tax Court tried the matter in four phases: phase one addressed the propriety of assessing the property based on prospective uses not yet permitted; phase two would address "usable acreage and the development potential of the subject property" with the judge to "rendera decision quantifying the number of usable acres that can be readily developed at the subject property during each tax year under protest; phase three was limited to the valuation of the property for tax years 2004 through and including 2011; and phase four would address valuation for tax years 2012 through 2018. The parties entered into a stipulation of value and requested a final judgment, which the judge utilized in entering orders as to all the pending matters.

The assessed value of the property was $20,629,300 for 2004 through 2008. It increased to approximately $80,000,000 for 2009 and 2010 and decreased to $58,715,200 for 2011. In 2012, the property further decreased to $42,715,200; $42,367,500 for 2013; and $42,000,000 for 2014 through 2019.

Phase One Reports and Expert Reports

In March 2006, John Lynch, the Township's Planner, issued an investigative report on whether the property could be declared an area in need of redevelopment under the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 to -49 (the LRHL). Lynch concluded that the location and layout of the remaining industrial structures, the Superfund designation, and the remediation and monitoring facilities "seriously constrain the development of the remainder" of the property. He recommended redevelopment under the LRHL in order to comprehensively address the property in contrast to"conventional zoning measures," which could lead to "piecemeal development applications" that were less likely to result in the best use of the property.

Lynch considered redevelopment of the entire property as one parcel because the limited access made it "imperative" to address all access and infrastructure issues concurrently. Including the portions that were not amendable to development, due to wetlands and flood-hazard areas, would "allow for more comprehensive planning." Redevelopment plans contemplated large-scale commercial uses, and the residential use of up to 600 age-restricted housing units along a golf course on the site.

On March 15, 2006, the Township noticed a public hearing on whether to pursue redevelopment of the property. In response, CIBA filed a lawsuit to challenge the Township's designation of the property as being in need of redevelopment. The matter was settled by "withdrawal" of the designation without prejudice.

CIBA engaged the realty firm of Cushman & Wakefield to issue a Request for Proposals and Concept Plans (the RFP).2 Proposals were submitted in response to the RFP to construct residential units, townhomes, age-restricted housing, one million square feet of retail use, 50,000 feet of office space,walking paths, and a golf course with a country club. A "sports resort" with a hotel and recreational activities was among other responses to the RFP.

In July 2008, the EPA issued its Second Five-Year Report3 on the Site and found the OU1 and OU2 remediation activities were proceeding as anticipated. Of the three options the EPA could select to characterize the Site's status on the NPL, the EPA chose "Final" rather than "Deleted" or "Other." The report noted the volume of contaminated soil had been reappraised from 240,000 to 250,000 cubic yards.

On April 3, 2009, EcolSciences, Inc. issued a report to CIBA on its study of threatened and endangered species on the property. It found three species of non-woody flowering plants that were State-listed as being of special concern but not as endangered, and three wildlife species and potential habitat for those and other species. The Northern pine snake was resident on the property.

In May 2011, Lynch reported to the Township that the environmental remediation activities for the property's surface soils and its "upper aquifer" had been proceeding in excess of twenty years. The "soil cleanup [was] near or at completion," while "the pump and treat of the upper aquifer should continue forabout another [twenty-five] years." Lynch concluded that only 750 acres could be developed due to the remediation activity, the wetlands and wetland transition areas, habitat areas for the "threatened and endangered species" on the site, and the CAFRA requirements for preserving tree cover. In 2009, BASF, a multinational chemical company, acquired CIBA.

On July 12, 2012, BASF made a presentation to the EPA of its Conceptual Property Management Plan. BASF proposed to "delist" or delete from the NPL areas in the western, northern, and southern portions of the property that were labeled in schematics as having an "unrestricte...

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