Developing Contaminated Sites [VIDEO]

In this hot-topic discussion, a developer, two attorneys, and an environmental lawyer/LSRP veteran walked through how New Jersey projects actually move from idea to ribbon-cutting — and where they fail. Below is a guide distilled from that conversation, with a focus on what municipal officials, developers, LSRPs, and environmental professionals should keep in mind.

1) Big Picture: Why Redevelopment in NJ Is So Hard (and Still Worth It)

• The easy sites are gone. What’s left are complicated, encumbered properties: contamination, aging utilities, flood risk, EJ overlays, Highlands/Pinelands constraints, and political sensitivity.
• Redevelopment law is the main engine. Local Redevelopment and Housing Law (LRHL) lets municipalities:
  • Designate “areas in need of redevelopment/rehabilitation”
  • Supersede traditional zoning with a redevelopment plan
  • Use tools like pilots (payment in lieu of taxes) and, in limited cases, condemnation
• Team quality is make-or-break. Everyone emphasized the same thing: projects succeed when the municipal attorney, developer, environmental professionals, planners, and financial advisors all know the redevelopment world and can “speak each other’s language.”

2) Municipal Perspective: How Towns Evaluate Developers

Joanne Vos framed redevelopment as “a bit like dating” — everyone is evaluating everyone.

Once a site is designated and a redevelopment plan is in place, municipalities typically:

• Vet the redeveloper:
  • Track record in other towns
  • Financial capacity to both build and finish (including remediation)
  • Reputation with neighboring municipalities (they all talk to each other)
• Use a Conditional Designation Agreement:
  • Town says: “We won’t talk to other redevelopers for this site for X days.”
  • Developer says: “We’ll invest in putting together a real proposal.”
  • Sets up the path toward a full Redevelopment Agreement.
• Take politics and public memory seriously:
  • A developer with a bad history in Town A can get quietly flagged in Town B.
  • Public backlash often starts with reputation, not technical details.

LSRP angle:
As an LSRP or technical consultant, understand that your client’s “soft” credentials (reputation, track record, communication style) can matter as much as your RAWP.

3) Developer Perspective: Finding Sites, Reluctant Sellers, and “Poison Pills”

Clark Machemer described 25+ years of NJ industrial redevelopment this way: the longer you’ve been doing it, the more you remember how much easier it used to be.

How developers think about sites

• Municipality first, not last. The very first step is usually a sit-down with the town:
  “What do you want here? Are you willing to do redevelopment? Are you open to a pilot?”
• Subsurface & infrastructure are key modern poison pills:
  • Complex subsurface conditions and geotechnical surprises
  • Old water/sewer systems with limited capacity
  • Flood hazard issues and new flood rules
• Contamination is now “manageable.”
  With the LSRP program, established capping strategies, and historic fill tools, environmental issues have dropped down the list of top project-killers — not gone, but more predictable.

Reluctant sellers & condemnation

• Many prime sites are owned by families or companies with emotional or legacy attachments.
• A town can choose a redevelopment plan “with condemnation”:
  • Must show good faith negotiations failed.
  • Once the declaration of taking is filed, the town owns the property immediately – the remaining fight is about fair market value, decided by commissioners.
• Condemnation is a last resort:
  • Politically unpopular, similar to public reaction to pilots.
  • Often avoided by leveraging increased value created by rezoning/redevelopment.

LSRP angle:
Understand that site access, timing, and what you’re allowed to sample can be heavily influenced by these negotiations and by seller comfort.

4) Pilots & Incentives: Why Projects Rarely Work Without Them

Why towns (quietly) want them too

• PILOT revenues are shared differently than regular taxes:
  • The municipality often keeps a larger share.
  • The school board still gets its budgeted amount via the town’s overall levy.
• PILOT revenue can be pledged to finance infrastructure, via revenue allocation bonds:
  • Example discussed: replacing 1880s–1910s wooden water mains using PILOT-backed bonds.

Why the public hates them

• The word “abatement” triggers a belief that:
  • Developers “aren’t paying their fair share”
  • Schools will suffer
• Even sophisticated explanations often “fall on their head” at public meetings.

LSRP angle:
When you hear “the economics don’t work without a pilot,” that’s real. Cap design, remedial approach, and infrastructure costs directly feed the pro forma that drives pilot negotiations.

5) Due Diligence & LSRPs: AI, Tanks, and the Reporting Trap

Steve Senior focused on the due diligence reality: environmental risk is manageable, but only if you actually know what you have.

The “no LSRP / no invasive testing” contract problem

Typical seller-side deal protections:

• No LSRP involvement in diligence
• No invasive sampling without seller consent
• Heavy limits on reporting or “creating new problems”

Workarounds:

• Naming one specific LSRP both sides agree can participate.
• Allowing non-invasive tools (e.g., GPR) first — which in one example still found three unknown tanks on a supposedly “fully characterized” ISRA site.
• Structuring diligence around “all appropriate inquiry” and reserving invasive sampling for when there’s a clear technical basis.

LSRP reporting & evolving rules

• Under SRRA, the LSRP must report certain discoveries to NJDEP.
• A recent rule proposal would have required “any person” who becomes aware of a discharge to report it — creating enormous concern for:
  • Buyers’ consultants doing diligence
  • Municipalities and attorneys
• There’s strong pushback based on legislative intent; everyone is watching how NJDEP ultimately resolves this.

AI and certifications

Jorge closed with a warning:

• LSRP certifications require you to state you’ve evaluated “training, education, and experience” of those you rely on.
• If you let a generic AI system interpret your data or design your remedy, how do you:
  • Assess the “qualifications” of an opaque model?
  • Document its assumptions or biases?
• Conclusion: AI may be a tool for brainstorming or drafting, but using it to drive technical judgments or regulatory decisions is a litigation trap.

6) Environmental Risk: From “Top Concern” to “Still Critical, But Different”

Everyone agreed: the LSRP program and decades of experience have made contamination more predictable:

• Capping, EC/ICs, historic fill, and clear standards mean:
  • Most contamination is not a deal-killer by itself.
• The bigger headaches now:
  • Flood hazard & climate resilience
  • CAFRA, Highlands, Pinelands, waterfront rules
  • EJ (Environmental Justice) overlays and community opposition
  • “Change” wildlife connectivity guidance and similar tools

For warehousing in particular:

• Warehouses, McDonald’s, pilots, and affordable housing reliably draw crowds to public meetings.
• Warehouse projects face:
  • Traffic, air quality, and EJ concerns
  • Objectors using every available guidance document (even non-binding ones) to challenge approvals

LSRP angle:
Your conceptual site model now lives inside a larger ecosystem: floodmaps, EJ maps, wildlife corridors, public politics, and infrastructure capacity.

7) Affordable Housing & “Dirty Sites”: The Weaponization of Risk

Joanne highlighted a pattern:

• Inclusionary/affordable housing projects often see environmental arguments used as proxies for deeper opposition:
  • “So you’re putting poor people on a dirty site?”
• Sometimes the concern is legitimate, but often it’s a tactical move to stop the project.
• LSRPs and environmental professionals will be pulled into those narratives — your work can:
  • Legitimately support needed protections, or
  • Be misused as a public relations weapon.

Takeaway:
Be clear, transparent, and careful in how risk, exposure, and remedy are communicated, especially for residential and affordable projects.

8) Practical Tips from the Panel (for Developers, LSRPs, and Municipalities)

For developers & their teams

• Engage the municipality early.
  Don’t show up with a fully baked plan and no local input.
• Bring two things to the first meeting:
  1. Compelling visuals (architectural renderings).
     People “vote with their eyes.” Pretty, well-designed buildings change the emotional temperature.
  2. A pro forma at the right level of detail.
     Enough to show:
     • Why the project is hard
     • Where gaps are
     • What the town might reasonably ask for in return (community benefits, infrastructure, fire truck, etc.)
• Design better buildings.
  Concrete boxes generate opposition. Better architecture can help with:
  • Public acceptance
  • Seller comfort (“I can feel good about what’s going on my land”)

For municipalities & their professionals

• Keep your zoning current.
  Don’t be “shocked” when someone proposes what your map actually allows.
• Use redevelopment powers thoughtfully.
  • Redevelopment + incentives often the only way hard sites pencil out.
  • But condemnation and pilots must be framed and communicated carefully.
• Know when you need experts.
  Planners, environmental counsel, LSRPs, and financial advisors all help avoid bad deals and dead projects.

For LSRPs & environmental consultants

• Anchor your sampling to decisions, not fear.
  More samples aren’t always better — they should be:
  • Tied to clear questions
  • Proportionate to the risk and deal size
• Understand your client’s risk tolerance.
  The question is often: “Would you still do this deal if you discovered another $2M of cleanup?” That answer should shape the level of diligence.
• Document your rationale.
  Especially when you:
  • Don’t test for emerging contaminants
  • Choose not to extend delineation
  • Accept existing RAOs and prior work

9) Key Takeaways

1. Redevelopment is where the action is in New Jersey — but it’s inherently complex, political, and multidisciplinary.
2. Team quality matters as much as the site. Experienced municipal attorneys, developers, LSRPs, and environmental counsel can “see around corners” and avoid self-inflicted wounds.
3. Incentives (pilots, state programs, revenue bonds) are not side dishes; they’re often what make projects financially possible.
4. Contamination is rarely the sole deal-killer anymore, thanks to the LSRP program and decades of practice — but flood, EJ, infrastructure, and politics can be.
5. Due diligence is non-negotiable. Even “characterized” ISRA sites can hide tanks; contracts must balance seller protections with buyer needs.
6. AI is not (yet) a certifiable expert. Using it to drive technical LSRP decisions creates real risk under current certification language.
7. Public opposition is predictable. Warehouses, pilots, McDonald’s, and affordable housing will draw a crowd; plan engagement and communications accordingly.

Want to Go Deeper?

CPES is continuing to develop programming that digs further into:

• Redevelopment agreements & conditional designation structures
• LSRP roles and due diligence under evolving NJDEP rules
• Balancing EJ, warehousing, and community concerns
• Structuring incentives (pilots, state EDA programs, revenue bonds)
• Managing risk in affordable housing and inclusionary projects

If you’d like to be notified about future sessions or more focused webinars on New Jersey redevelopment and LSRP practice, let us know and we’ll keep you in the loop when new programs launch.